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parent/subsidary corporations under 424(e) & 424(f)


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Posted

If a parent company has 4 wholly owned subs and then aquires a new sub that is owned 25% by each of the 4 wholly owned subs, can the new sub participate in the parent's 423 plan? I did not see any attribution rules associated with this section.

Guest Harry O
Posted

My quick reaction is that you have a problem. The statute doesn't seem to cover your case. My recollection is that there is nothing of substance in the regulations on this issue. You may want to check the PLRs to see if the IRS has granted any exceptions to what appears to be a strict statutory requirement.

Good luck.

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