Recent private letter rulings by the IRS illustrate the broad
scope of tax planning available with respect to internal
restructurings of controlled groups.
An issue that routinely arises both in corporate tax practice
and in the Internal Revenue Service (IRS) private rulings program
is whether a transfer of property (including money) from a
shareholder to a corporation that occurs in temporal proximity to a
distribution of property (including money) from the corporation to
the shareholder should be viewed as an exchange. This so-called
"North-South" issue often is raised in the context of
spin-off transactions, but may arise in reorganizations or
incorporations as well. Examples include transfers that are
nominally contributions of cash, stock or other property by a
shareholder that occur relatively close in time with purported
corporate distributions of cash or stock. The tax consequences of
such transfers may be changed radically if treated as exchanges. Of
course,
