We conducted a painstaking study of 150 US publicly traded spin-offs completed over the past ten years and found that 1/3 never sought a private letter ruling from the IRS (i.e. 50 out of 150) and instead relied upon opinion of tax counsel. To our knowledge, the IRS has not come back to challenge any of those deals.
The market has been trying to interpret the meaning of the IRS 'no-rule' on the Aabaco spin-off. We hope that by sharing this information we can shed some statistical light on this subject. Lots of spin-offs proceed in the absence of a private letter ruling, and we would expect that Aabaco would be no different.
If you are interested to obtain a copy of the study please feel free to contact me.
Disclosure: I am/we are long YHOO.
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