¹P.L. 107-204.

²TD 8984 (3/7/02), amended by TD 8998 (5/30/02).

³Rite Aid Corp., 255 F3d 1357 (2001), rev’g 46 Fed. Cl. 500 (2000).

⁴For additional discussion on Rite Aid Corp., id., see Schneider and Magoon, “Corporation & Shareholders: Significant Recent Developments,” 33 The Tax Adviser 18 (January 2002) (hereinafter, “Schneider and Magoon”).

⁵TD 8988 (4/29/2002). The first set of temporary regulations were adopted on July 26, 2001 (TD 8960). This article focuses on the revised temporary regulations. For a discussion of the highlights of the first set of temporary regulations, see Schneider and Magoon, note 4 supra.

⁶TD 8975 (1/2/02).

⁷Taxpayers may also use prior Temp. Regs. Sec. 1.337(d)-5T for transfers made within this period; see Temp. Regs. Sec. 1.337(d)-6T(e).

⁸General Utilities & Operating Co., 296 US 200 (1935).

⁹Rev. Rul. 2001-46, 2001-2 CB 321.

¹⁰Rev. Rul. 90-95, 1990-2 CB 67.

¹¹H. Rep. No. 97-760, 97th Cong., 2d Sess. 536 (1982). If the step-transaction doctrine had been applied in Rev. Rul. 90-95, note 10 supra, the transaction would have been recast as a direct taxable asset acquisition resulting in a cost basis; it would not have qualified as a reorganization under Sec. 368(a)(1) because only cash was issued in the stock purchase. Thus, the continuity-of-shareholder-interest requirement under Regs. Sec. 1.368-1 would not have been satisfied.

¹²Rev. Rul. 2002-1, IRB 2002-2, 268.

¹³Rev. Rul. 2002-49, 2002-IRB 32, 288.

¹⁴See Rev. Rul. 92-17, 1992-1 CB 142, which holds that a corporation may meet the active-trade-or-business requirement by virtue of its activities with respect to a partnership.