What happens when a corporation is sold, sellers often wish to defer the taxable gain on a sale of shares.

What happens when a corporation is sold, sellers often wish to defer the taxable gain on a sale of shares. Under the US tax code, such gain deferral may be accomplished through a tax-free reorganization pursuant to IRC Sec. 368(a)(1). Please consider the common requirements (listed below) that each one of these reorganization types must meet to qualify for tax-free treatment. Please select one requirement and discuss how failure to meet the requirement may preclude qualifying for a tax-free reorganization. Pursuant to plan of reorganization Continuity of interest Continuity of business enterprise Business purpose test.






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