Reporting Cross-Border Transfers and Reorganizations on IRS Form 926
By Anthony Diosdi If a U.S. corporation is liquidated and its assets are distributed to foreign shareholders, U.S. tax will be imposed on the gain realized by the distributing corporation except to the extent that a tax-free-exchange provision provides otherwise. Likewise, if the stock or assets of a corporation are acquired by a foreign corporation in exchange for stock of the foreign corporation, or if, conversely, a foreign corporation is acquired for stock of a U.S. corporation, gain realized by U.S. shareholders and the U.S. corporation will also be subject to tax, except to the extent that the gain is sheltered by a tax-free-exchange provision. Even an acquisition of one foreign corporation by another foreign corporation involving U.S. shareholders who exchange their stock in the acquired corporation for stock in…