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Spin-Off
(redirected from Spinoffs)

    Also found in: Financial, Wikipedia 0.06 sec.

The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders.

When a spin-off occurs, the shareholders of the parent corporation are not required to surrender any of their parent corporation stock in exchange for the subsidiary's stock.

In the event that the distribution of stock to the parent corporation's shareholders amounts to a dividend, the distribution can be taxed pursuant to provisions of Income Tax statutes.
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? References in periodicals archive
Bault, however, said he doesn't buy the risk-avoidance theory for the spinoffs.
A chip off the old block: Equity analysts say hard market spurs ... by Pilla, David / Best's Review
The IRS recently published a notice of nonacquiescence to the Tax Court decision, saying it intends to object to all tax-free spinoffs in which the stock is sold shortly after distribution.
Spinoff to permit employee stock purchases by Schnee, Edward J. / Journal of Accountancy
Pension-plan spinoffs are governed by Sections 208 of ERISA and 414(1) of the IRC.
How to avoid a splitting headache by Riebold, Mary S. / Financial Executive
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