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Section 355 transaction October 01, 2024 United States United States United States LexisNexis In this Practical Guidance^® Practice Note from LexisNexis, Eversheds Sutherland attorneys Aaron Payne, Randy Buchanan, Megan Hall, Svetlanna Espinosa-Valdes and Teddy Smith provide a general overview of the relevant law and key considerations related to the allocation of previously taxed earnings and profits (PTEP), within the meaning of I.R.C. § 959, in an internal spin-off of a foreign corporation under I.R.C. § 355. In particular, this Practice Note covers: The basics for understanding PTEP, a high-level summary of certain requirements under I.R.C. § 355, the rules for allocating earnings and profits in a spin-off transaction, three potential methods to consider when determining how to allocate PTEP in spin-off transactions, and certain practical tax considerations to consider in selecting a method. The materials on the Eversheds Sutherland website are for general information purposes only and do not constitute legal advice. While reasonable care is taken to ensure accuracy, the materials may not reflect the most current legal developments. Eversheds Sutherland disclaims liability for actions taken based on the materials. Always consult a qualified lawyer for specific legal matters. To view the full disclaimer, see our Terms and Conditions or Disclaimer section in the footer. Services Business Taxation Federal Tax Tax Key contacts Aaron M. Payne Partner Washington, DC, United States Randy Buchanan Partner Washington, DC, United States Megan K. Hall Partner Washington, DC, United States Svetlanna N. 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Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the member firms or their controlled, managed or affiliated entities are in a partnership or are part of a global entity. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client. For information on Konexo please also see the Legal Notices page of this website ATTORNEY ADVERTISING - Prior results do not guarantee a similar outcome. Unless otherwise indicated, attorneys at Eversheds Sutherland (US) LLP are not certified by the Texas Board of Legal Specialization.

Allocating PTEP in an I.R.C. Section 355 transaction

October 01, 2024

United States

LexisNexis

In this Practical Guidance^® Practice Note from LexisNexis, Eversheds Sutherland attorneys Aaron Payne, Randy Buchanan, Megan Hall, Svetlanna Espinosa-Valdes and Teddy Smith provide a general overview of the relevant law and key considerations related to the allocation of previously taxed earnings and profits (PTEP), within the meaning of I.R.C. § 959, in an internal spin-off of a foreign corporation under I.R.C. § 355.

In particular, this Practice Note covers:

The basics for understanding PTEP,
a high-level summary of certain requirements under I.R.C. § 355,
the rules for allocating earnings and profits in a spin-off transaction,
three potential methods to consider when determining how to allocate PTEP in spin-off transactions, and
certain practical tax considerations to consider in selecting a method.

The materials on the Eversheds Sutherland website are for general information purposes only and do not constitute legal advice. While reasonable care is taken to ensure accuracy, the materials may not reflect the most current legal developments. Eversheds Sutherland disclaims liability for actions taken based on the materials. Always consult a qualified lawyer for specific legal matters. To view the full disclaimer, see our Terms and Conditions or Disclaimer section in the footer.

Aaron M. Payne

Partner

Washington, DC, United States

Randy Buchanan

Partner

Washington, DC, United States

Megan K. Hall

Partner

Washington, DC, United States

Svetlanna N. Espinosa-Valdes

Associate

Washington, DC, United States

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Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed or affiliated firms and the members of Eversheds Sutherland (Europe) Limited and Eversheds Sutherland (Africa) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the member firms or their controlled, managed or affiliated entities are in a partnership or are part of a global entity. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client. For information on Konexo please also see the Legal Notices page of this website
ATTORNEY ADVERTISING - Prior results do not guarantee a similar outcome.
Unless otherwise indicated, attorneys at Eversheds Sutherland (US) LLP are not certified by the Texas Board of Legal Specialization.

Allocating PTEP in an I.R.C. Section 355 transaction

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