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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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
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"Every spinoff is a tangible reminder of NASA's return on investment to the taxpayer.
Following the spinoff, Rankin will become the chairman, president and CEO of the new company.
In honor of the 40th anniversary of the Apollo 11 lunar landing, this year's edition of Spinoff also recaps how Apollo continues to provide tangible benefits to the lives of people in the U.S.
"After a thorough and thoughtful review, the board unanimously approved the spinoff with the intent to create greater long-term value for shareholders," said R.
When net execs in denial try to squeeze new life out of retiring shows, they usually come up with duds such as "MASH" spinoff "AfterMASH," "Three's Company" spawn "Three's A Crowd" and "Golden Girls" progeny "The Golden Palace."
Having the right board in place to help guide the spinoff in determining strategy, as well as overseeing management and fiduciary matters, can be a critical element in the ultimate success of the spinoff as a stand-alone business.
To qualify as a tax-free spinoff, a transaction must satisfy four basic requirements:
96-30 include (1) the detailed information, representations, and documentation required for establishing a valid corporate business purpose; (2) a description of the facts and circumstances that may qualify the business purpose; (3) a description of each purpose for the spinoff, not just the corporate business purpose; (4) the required information and representations from foreign shareholders and foreign corporations; and (5) the required information and representations where Distributing joins in filing a consolidated return.
All accrued benefits as of the spinoff date, as well as all early retirement subsidies, annuity forms and other rights and features attached to these benefits would be included.
The yet to be titled "Grey's Anatomy" spinoff will also feature Jason George's character, Dr.
351 transfers and divisive D reorganizations (i.e., D reorganizations undertaken to affect a corporate spinoff).