Spin-off shares


E

Ed Schillmoeller

I recently received a distribution of 1 share of a new
company (Cavco) for every 20 shares I own of an existing
company (Centex). This was followed by a "Tax Information
Statement" from the distributing company which included the
following:

"Under IRS regulations (1.355-5(b)), you must attach to your
Year 2003 income tax return a statement containing all
details needed to show the applicability of section 355 of
the Internal Revenue code. Attached is a suggested form you
can use for this purpose"

The form included the following:

"By letter dated April 17, 2003 the Internal Revenue Service
ruled that the distribution of shares of Cavco was a
nontaxable 355 corporate separation."

I've received spin-off shares before but this is the first
time I've been told that I need to attach a statement about
the distribution to my tax return. Is this something new?
What is IRS regulation 1.355-(5b)?
 
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A

Arthur Kamlet

Ed Schillmoeller said:
I recently received a distribution of 1 share of a new
company (Cavco) for every 20 shares I own of an existing
company (Centex). This was followed by a "Tax Information
Statement" from the distributing company which included the
following:

"Under IRS regulations (1.355-5(b)), you must attach to your
Year 2003 income tax return a statement containing all
details needed to show the applicability of section 355 of
the Internal Revenue code. Attached is a suggested form you
can use for this purpose"

The form included the following:

"By letter dated April 17, 2003 the Internal Revenue Service
ruled that the distribution of shares of Cavco was a
nontaxable 355 corporate separation."

I've received spin-off shares before but this is the first
time I've been told that I need to attach a statement about
the distribution to my tax return. Is this something new?
What is IRS regulation 1.355-(5b)?
The lawyers are trying to cover themselves at your expense.

I would ignore this and just throw it in with your personal
tax records, but don't worry about it any more.

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
 

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