Confusion Abounds on Sourcing Rules in D Reorganizations, ABA Says

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Oct. 6 — The American Bar Association Section of Taxation has offered several alternatives on the sourcing of earnings and profits for boot in corporate reorganizations.
“There currently is uncertainty about when, if ever, the E&P of the acquiring corporation is counted for determination of the amount of dividend within gain under section 356(a) in reorganizations other than the one corporation reorganizations under sections 368(a)(1)(E) and (F),” the tax section wrote in an Oct. 6 letter to IRS Commissioner John Koskinen.
The tax section's letter offered several options for determining when pooling is appropriate with corporate reorganizations in identifying the corporation to which tax code Section 356(a)(2) refers.

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