Corporate distributions of appreciated property
The Tax Reform Act of 1984 makes changes affecting corporations that wish to spin off a royalty trust and distribute trust units to their shareholders. The Act requires the recognition of a gain to a corporation on nonliquidating distributions of appreciated property. It imposes a tax on the appreciation in value equal to the fair market value of the property less the adjusted basis of the property. The changes may make a spinoff too costly for corporations with a high percentage of noncoporate shareholders. It may have created a tax advantage, however, for the distribution of appreciated property to corporate shareholders through the step-up in basis to the corporate shareholder by the gain recognized by the distrubutee corporation. Such gain may be deferred by corporations filing consolidated returns. 2 figures.
- Research Organization:
- Texas A and M Univ., College Station
- OSTI ID:
- 6247242
- Journal Information:
- Oil Gas Tax Q.; (United States), Journal Name: Oil Gas Tax Q.; (United States) Vol. 33:2; ISSN OGTQD
- Country of Publication:
- United States
- Language:
- English
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