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GainsKeeper in the News
Director, Corporate Communications
Wolters Kluwer Financial Services
On Twitter: @JenniferMarso
Senior Public Relations Specialist
Wolters Kluwer Financial Services
On Twitter: @AngiePeterson
WALTHAM, Mass. – Jan. 19, 2011 – Wolters Kluwer Financial Services has released its annual Top 10 Corporate Actions, a list of the most challenging corporate actions from the past year.
The tax and legal experts at Capital Changes, a part of Wolters Kluwer Financial Services that provides corporate action reporting, tax information and analysis, compile the annual listing to alert taxpayers and their financial and tax advisors to corporate actions that have complex or unusual tax consequences.
Corporate actions in the U.S. indicated signs of a somewhat improving economy in 2010, as some companies emerged from reorganization and presented common shareholders with distributions.
“Corporate reorganizations can be structured in different ways and for different reasons,” said John Kareken, senior analyst for Capital Changes at Wolters Kluwer Financial Services. “However, they occasionally take a surprising twist that presents special challenges. And sometimes even simple events may include unexpected complications.”
One form of corporate reorganization that continues to raise special concerns is the spinoff, or demerger as it’s known outside the United States. In nontaxable spinoffs, the key question is how to allocate basis between existing shares and the shares of the new company received as part of the event. Answering this question becomes particularly critical in 2011 as the new cost basis reporting law has now taken effect.
The cost basis reporting law also presents challenges for U.S. taxpayers invested in foreign companies.
“U.S. investors holding non-U.S. companies have always had to contend with special tax rules that apply to cross-border transactions, but the cost basis reporting law is one of the newest concerns,” said Lainey Duggan, senior analyst for Capital Changes at Wolters Kluwer Financial Services. “Many foreign companies don’t provide information on how a corporate event should be taxed under the U.S. Internal Revenue Code, which presents challenges for U.S. financial services firms that are now responsible for reporting basis on foreign corporate actions.”
The Top 10 List for 2010 was selected based on voting by Capital Changes subscribers and corporate actions professionals, as well as other criteria, such as how widely held the affected security was and how complex the tax issues were. That analysis shows the following companies’ corporate actions were especially noteworthy:
Top U.S. Transactions
1. Burlington Northern Santa Fe Corp.
2. Weyerhaeuser Co.
3. Coca-Cola Enterprises Inc.
4. Verizon Communications Inc.
5. General Growth Properties Inc.
Top International Transactions
1. Royal Dutch Shell plc
2. Brasil Telecom S.A.
3. Cable & Wireless plc
4. Allied Irish Banks plc
5. Accor S.A.
Details about each corporate action and why it is particularly challenging will be presented during the web seminar “Top 10 Corporate Actions of 2010,” which will be held Tuesday, February 8, 2011.
About Wolters Kluwer Financial Services
Wolters Kluwer Financial Services is a comprehensive regulatory compliance and risk management business that helps financial organizations manage operational, compliance and financial risk and reporting, and improve efficiency and effectiveness across their enterprise. The organization’s prominent brands include: FRSGlobal, ARC Logics for Financial Services, PCi, Compliance Resource Network, Bankers Systems, VMP® Mortgage Solutions, AppOne®, GainsKeeper®, Capital Changes, NILS, AuthenticWeb™ and Uniform Forms™. Wolters Kluwer Financial Services supports its global customers with offices in more than 20 countries and is a leading worldwide provider of compliance and risk management solutions for the financial services industry, serving more than 15,000 banking, insurance and securities customers across the globe. Wolters Kluwer Financial Services is part of Wolters Kluwer, a leading global information services and publishing company with annual revenues of (2009) €3.4 billion ($4.8 billion) and approximately 19,300 employees worldwide. Please visit our website for more information.