• To the Direct Acquirer Belong the Tax Attributes: Proposed Regulations Modify the Definition of Acquiring Corporation for Purposes of IRC § 381
  • May 13, 2014 | Authors: Dennis L. Allen; Robert S. Chase; Reginald J. Clark; Jeffrey H. Mace; Michael R. Miles
  • Law Firms: Sutherland Asbill & Brennan LLP - Washington Office ; Sutherland Asbill & Brennan LLP - Atlanta Office ; Sutherland Asbill & Brennan LLP - New York Office ; Sutherland Asbill & Brennan LLP - Washington Office
  • On May 7, Treasury and the IRS published proposed regulations addressing which corporation succeeds to the tax attributes of another corporation that transfers assets in an acquisitive asset reorganization described in IRC §§ 368(a) and 381(a)(2) (the Proposed Regulations). In brief, the Proposed Regulations provide that the corporation that directly acquires the assets transferred in the reorganization succeeds to the tax attributes of the transferor corporation, even if the direct acquirer subsequently transfers all of the acquired assets to a single controlled subsidiary pursuant to the plan of reorganization. In providing for this result, the Proposed Regulations affirm and extend the approach of the 2012 proposed regulations under IRC § 312, which address the allocation of earnings and profits of a transferor corporation in an IRC § 381 transaction.