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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a It may still be possible to have a taxfree reorganization even if contingent consideration is used The tax treatment of a reorganization depends on ...View the full answer
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Related Book For
CCH Federal Taxation 2019 Comprehensive Topics
ISBN: 9780808049081
2019 Edition
Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback
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