Are corporate reorganizations a taxable event?
Generally, no gain or loss will be recognized in the event of a reorganization by either the shareholders or the corporation as the corporation is not distributing assets, but merely reorganizing the structure of the entity.
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What is a reorganization?
Reorganizations are considered to be nontaxable events and will exist if the reorganization can demonstrate a continuity of business. A continuity of business means that the company will be able to continue operating or continue business operations subsequent to the reorganization. Note that these differ from liquidating distributions in the sense that the company is […]