An Overview of Type C Tax-Free Reorganizations and Type C Tax-Free Triangular Reorganizations
By Anthony Diosdi In the corporate tax context, the term “reorganization” is a statutory term of art. Rather than providing a general definition, the Internal Revenue Code attempts to provide precise definitions for the term “reorganization” in Section 368(a)(1) with an exclusive list of seven specific types of transactions that will be considered “reorganizations.” Subparagraphs (A) through (G) of Section 368(a)(1) each provide a description of a particular reorganization transaction. Unless a transaction fits into one of the seven categories stated in subparagraphs (A) through (G), it is not a corporate reorganization. In a Type C reorganization, the purchasing corporation acquires “substantially all of the properties” of another corporation. Thus, a Type C reorganization is often referred to as an “asset acquisition.” If the target corporation transfers less than substantially…