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In the case at hand, the restructuring and spinoff do not
fit either exception to the general rule. Section 1.1502-
2(d)(2)(ii), Income Tax Regs., requires that the common parent
cease to exist following the restructuring and petitioner’s
existence has, of course, continued. Nor did the restructuring
constitute a reverse acquisition within the meaning of section
1.1502-75(d)(3), Income Tax Regs., which contemplates situations
in which the acquiring and acquired corporations were not
affiliated prior to the restructuring. The restructuring in the
case at hand was an intra-group transaction, rather than an
inter-group transaction. See Rev. Rul. 85-152, 1985-2 C.B. 261.
Respondent, in the statutory notice to petitioner,
recharacterized the restructuring and spinoff and applied the
general rule of section 1.1502-75(d)(1), Income Tax Regs., to
determine that the affiliated group continued with petitioner as
the common parent, with AMC as its only subsidiary. Pursuant to
the determination that petitioner was the continuing common
parent of the group, respondent determined that petitioner’s 1986
tax year was 52 weeks, not 27 weeks as claimed by petitioner.
Respondent determined that Interlake was the common parent of a
new affiliated group that consisted of all of the former
subsidiaries of petitioner, except AMC, and that Interlake and
the continuing members of its new affiliated group had 2 short
taxable years in 1986. Respondent also determined that the
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