Research Problem. In practice, the number of shares paid for an acquired corporation may be contingent on

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Research Problem. In practice, the number of shares paid for an acquired corporation may be contingent on its future performance (e.g., sales and/or earnings). Perhaps 500,000 shares are "paid" up front, while another 250,000 are placed in escrow, pending certain future events. If such contingent consideration is used in a purported reorganization:

a. Is it still possible to have a tax-free reorganization?

b. Does it matter whether negotiable "certificates of contingent interest" are issued?

c. Does it matter what the motivation is for the deferred arrangement?

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CCH Federal Taxation 2019 Comprehensive Topics

ISBN: 9780808049081

2019 Edition

Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback

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