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368 A 1 Reorganization With A Drop

368 Reorganization with a DROP

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Eric Moore
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171 views1 page

368 A 1 Reorganization With A Drop

368 Reorganization with a DROP

Uploaded by

Eric Moore
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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368(a)(1)(A) & 368(a)(2)(C) Copyright © 2006 Andrew Mitchel LLC

A Reorganization with a Drop International Tax Services


www.andrewmitchel.com
Initial Structure Target Asset Transfer Target Liquidation

1 2 3
Target Target Target
Shareholder(s) Shareholder(s) Shareholder(s)

Surrender
51% Acquiror Stock 100% of 51% Acquiror Stock
Acquiror Acquiror 49% Cash Acquiror 49% Cash
Target
Stock
merge
368(c) control
Target Target Target
Assets

Subsidiary Subsidiary Subsidiary

Nonrecognition Operative Provisions: Acquiror - section 1032, Shareholders - section 354(a)(1),


Target - section 361(a) Target - section 361(c)

Drop Ending Point


Acquiror shareholders omitted for
simplicity purposes.

368(a)(1) . . . the term Target


4 Target
5
"reorganization" means . . . (A) a Shareholder(s) Shareholder(s)
statutory merger or consolidation;

368(a)(2)(C) A transaction otherwise


qualifying under paragraph (1)(A) . . . Acquiror Acquiror
shall not be disqualified by reason of
the fact that part or all of the assets . Transfer of
. . which were acquired in the all or part of 368(c) control
transaction are transferred to a Target assets
corporation controlled by the
corporation acquiring such assets . . . Subsidiary
Subsidiary
.
All or part of Target assets

HUNDREDS of additional charts at www.andrewmitchel.com

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