IRS considering biotech-friendly spinout rule

The Internal Revenue Service announced it intends to revisit rules that could make it easier for biotechs to spin out assets.

In a statement, the IRS Office of the Chief Counsel announced a study and request for comments on a rule -- section 355(b) of the Internal Revenue Code -- that limits tax-free treatment of certain spinouts to companies that meet the requirements of an active trade or business (ATB), which include the collection of income. Many young biotechs engaged in lengthy R&D phases do not meet the threshold...