Bailout

What does Bailout mean in American Law?

The definition of Bailout in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:

Tax slang for any technique for getting profits out of a taxable entity, e.g., a corporation, in such a way that they will be taxed to the owners at a favorable rate, e.g., at capital-gains rather than ordinary-income rates. See, e.g., preferred stock bailout. The term is also used for the practice of acquiring an entity so as to acquire its tax advantages, e.g., its accumulated losses to apply to the acquiring company”s gains so as to reduce taxes. The practice is regulated by I.R.C. § 269.