Get Treatment Of Foreign Stapled Entity Under Section 269B As Domestic For Purposes Of

if a domestic corporation and a foreign corporation are stapled entities, the foreign corporation shall be treated as a domestic corporation.

An F-reorganization is a type of typically tax-free reorganizational structure that often involves a target company taxed as an S-corporation. The F-reorganization is so named because it involves a change in “form” of the target, while not changing the substance of the target for tax purposes.

In practice, F reorganizations arise in a number of contexts, including a corporation's name change, a change in the form of a corporation, a change in a cor- poration's state of incorporation, reorganization of an S corporation to facilitate a disposition of some or all of an S corporation's assets or legal entity ...

The conversion of preferred stock into common stock is treated as a recapitalization for federal income tax purposes. [3] A single corporation recapitalization generally qualifies as a tax-free Type E reorganization (Section 368(a)(1)(E)).

Under Internal Revenue Code § 368(a)(1)(D), a Type “D” Reorganization involves the transfer of all or part of a corporation's assets to another corporation where immediately after the transfer, the transferor (and/or one or more of its shareholders) controls the corporation to which the assets were transferred.

F-Reorganization Structure Highlights However, unlike a 338(h)(10) election, the F-reorganization does not require that target to maintain its S Corporation status, and it provides for tax-deferred treatment on rollover equity. (The last point is critical to sellers).