An Introduction to Type A Corporate Tax- Free Reorganizations
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. A Type A reorganization is a reorganization that fits within the Section 368(a)(1)(A) definition.A Type A reorganization is defined in the Internal Revenue Code as a statutory merger or consolidation. The term “statutory” refers to a merger or consolidation pursuant to…