Daily Tax Update - November 10, 2014: IRS ‪Issues Regulations on Allocation of Basis in All Cash D Reorganizations

IRS Issues Regulations on Allocation of Basis in All Cash D Reorganizations:  Today, the IRS and Treasury issued final regulations addressing the allocation of stock basis in an all cash D reorganization.  The final regulations amend regulations under Section 358(a) that provide rules for determining a taxpayer’s basis in stock or securities of an issuing corporation received without the recognition of gain or loss, as well as rules relating to the basis of other property received in the reorganization, in certain reorganizations described in Section 368.  These final regulations adopt without substantive change temporary regulations published on November 21, 2011. 

EU Court Approves Spanish Tax Incentives:  The General Court of the European Union overturned earlier Commission decisions and allowed Spanish incentives for shareholdings in foreign companies.  The overturned Commission decisions had found a Spanish tax regime that allowed deductions for shareholdings in foreign companies to be impermissible state aid.  The General Court annulled the Commission decisions, holding that the Commission failed to establish that the Spanish regime was selective; selectivity being one of the criteria for whether a benefit constitutes state aid.