The IRS issued proposed regulations to simplify and clarify rules governing accounting methods to be used after corporate reorganizations and tax-free liquidations under IRC section 381(a).
The proposed amendments to Treas. Reg. §§ 1.381(c)(4)-1 and
1.381(c)(5)-1 are intended to provide greater consistency between the
corresponding Code paragraphs. They provide that the accounting method
of an acquiring corporation after a § 381(a) transaction generally
will depend on whether the trades or businesses of the parties to the
transaction are combined. Comments on REG-151884-03 are requested by
Feb. 14.
