IRS partially withdraws 2005 proposed regulations on net value requirement in tax-free transactions

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On July 12, 2017, Treasury and the Service issued a notice  (REG-139633-08) which partially withdraws proposed regulations that would have required that there be an exchange of net value in order for certain corporate formations and reorganizations to qualify for nonrecognition treatment (the “Withdrawal Notice”). These partially withdrawn regulations would have also required a distribution of net value on each class of stock in order for the transaction to qualify as a liquidation under section 332.

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Julie Allen

National Tax Services Market Leader and Mergers and Acquisitions Tax Leader, PwC US

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