Section 6 Tax-Free Recapitalization

• Library: Business Transitions 2009 Supp

Delete the second paragraph in the original section and replace it with the following:

In addition to the statutory requirements of the Internal Revenue Code, Treasury Regulation § 1.368-1(b) requires a continuity of business enterprise and a continuity of interest to qualify as a tax-free reorganization, which is described in detail in § 1.368-1(d). The regulation specifies that tax-free treatment should only apply to transactions that “effect only a readjustment of [a] continuing interest in [the]...