A new analysis by a former high-ranking IRS official explains how the Tax Code’s corporate reorganization provisions afford tax-free treatment to certain corporate combinations and realignments.

How a corporation can qualify for tax-free treatment when it is reorganized is the subject of “Single Entity Reorganizations: Recapitalizations and F Reorganizations,” by attorney and PricewaterhouseCoopers partner Michael Kliegman, former group chief of the IRS Reorganization Branch of the Office of Chief Counsel.

In the study, Kliegman analyzes the tax consequences of two types of tax-free corporate reorganizations involving a single company: recapitalization under Section 368(a)(1)(E) and a change in identity, form or place of organization under Section 368(a)(1)(F).

The study discusses E and F reorganizations both separately and in relation to one another and to the other types of reorganizations under Section 368. The analysis discusses the business purpose requirements and basic tax consequences — including the treatment of the corporations involved and their shareholders and security holders — for each.

Kliegman's analysis is part of BNA's U.S. Income Portfolio Series. For more information, visit www.bnatax.com/tm/usincome.htm.

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