In some instances, taxpayers find that it is advantageous, or necessary, to restructure DISC operations. Restructuring can result in the creation of additional DISCs, merger of existing DISCs, distribution of DISC stock to the underlying shareholders, or liquidation of the DISC's shareholder.
The restructuring of DISC operations is one of the most complex aspects of the tax law because it combines the intricacies of the DISC provisions with the abstruse provisions for distributions, liquidations, and reorganizations. Also, this area is in a state of flux since legislative changes have recently been made and new regulations are expected.
Another type of restructuring involves termination of the DISC election. This chapter examines the few situations in which termi- nation is advantageous and describes the manner in which termination takes place.
Finally, the chapter examines two alternatives to DISC. Use of these alternatives may be feasible in certain situations.
Multiple DISCs
Some companies use a single DISC for their export activities;
others have more than one DISC. Multiple DISCs are sometimes,
