Spin-offs are not taxed as long as shareholders of the parent company are given at least 80% of the shares in the new company.

Question

Quizplus · Accepted Answer

This statement is true. As per the tax code in the United States, if a spin-off meets certain requirements, including the distribution of at least 80% of the shares of the new company to existing shareholders of the parent company, it can be tax-free.

Spin-Offs Are Not Taxed as Long as Shareholders of the Parent