How Will the Newly Proposed §355 Rules Work in Practice?

Tax attorneys Ryan Phelps and Bryan Marcelino co-authored an article for Bloomberg Tax discussing new proposed regulations by the U.S. Department of the Treasury and IRS under Section 355 of the Internal Revenue Code aimed at clarifying corporate distribution rules. These proposed regulations introduce safe harbors to promote transactional certainty, but concerns remain that they may limit flexibility because of stringent conditions. Additionally, the new Form 7216 filing requirements could impose a significant administrative burden on taxpayers engaging in corporate transactions.

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