Treasury Eyes Guidance on Spinoff Liability, Official Says

The US Treasury Department is taking a closer look at providing guidance on how liabilities are assumed and allocated during spinoff transactions, an official said Wednesday.

Theron West, attorney adviser in Treasury’s Office of Tax Policy, said during a panel at a Practising Law Institute tax conference in Chicago that the agency is considering the implication of what is a liability and what is debt within the deal-making landscape for tax purposes, including addressing scenarios in which there is an economic impact versus a legal impact.

• West was responding to a question from panelist Jodi Schwartz, partner at Wachtell, ...