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Unformatted text preview: Type A reorganizations: Is 40 or 50 percent stock enough to pass the continuity of interest test? The IRS and the Treasury Department are in disagreement over the “continuity of interest” test in a Type “A” reorganization. The IRS feels that 50% should be the minimum, but admits that there is a lesser amount that might be adequate. The Courts have sometimes allowed amounts in the 40’s. Footnote 9 on page 7‐10 refers to the Temporary Regulation that expired earlier this year. This is the first edition in which the authors brought up this Temporary Regulation. ...
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- Spring '08