Lesson 9-Objectives

After completing this lesson, students should be able to:

1.   Describe the types of transactions that qualify as tax free reorganizations under Section 368 of the Internal Revenue Code.

2.  Describe the doctrines of “continuity of proprietary interest” and “continuity of business enterprise” and state why these requirements need to be met for a transaction to be accorded treatment as a tax free reorganization.

3.	Describe the consequences of a transaction qualifying as a tax free reorganization to the target corporation, the “receiving corporation” and the target corporation’s shareholder(s).

4.	Apply the rules regarding the treatment of tax free reorganizations to a fact situation involving a purported Type C reorganization.