Chapter 17 Questions - Income Tax II Name _Christian...

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Income Tax II Name ____Christian Yimgnia________________ Chapter 17 Questions Explain and/or discuss the following based on reading the chapter and viewing the power points. Be thorough with your answers. You may take all the space you need. 1. Explain a Type A reorganization. Type A reorganization is either a merger or a consolidation meeting state law requirements. A merger occurs when one corporation absorbs another and a consolidation occurs when two or more corporations combine in a new corporation, the former ones dissolving. A major disadvantage is that all liabilities of the acquired corporation must be assumed by the acquiring corporation. However, an advantage to a Type A reorganization is the fact that the consideration that can be paid to the target’s shareholders is flexible. One example is if X Corporation acquires all the properties of Y Corporation in exchange for 1,000 shares of stock in X Corporation. The X Corporation stock is distributed to the Y shareholders in complete liquidation of Y Corporation. This transaction would qualify
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Chapter 17 Questions - Income Tax II Name _Christian...

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