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Unexpected Disqualification Of Reorganizations Under The Internal Revenue Code By The Inadvertent Transfer Of Boot, Alden H. Smith, Jr.

Vanderbilt Law Review

It is common today to read of corporations "merging" or of one corporation "buying out" another. Many of these transactions will be "reorganizations" under section 368(a) of the Internal Revenue Code. Section 368 is the current congressional resolution of two conflicting policies of tax law. On the one hand, it is desirable to promote the free mobility of capital in order that it be used in the most economical manner. On the other hand, there is the desire to prevent shareholders from using corporate reorganizations as a means of avoiding income taxes. The most common of shareholder schemes are those …

The Tax Treatment Of Collapsible Corporations, Boris I. Bittker

Vanderbilt Law Review

Introductory.-Section 331 (a) (1) of the Internal Revenue Code provides that a complete liquidation of a corporation is to be treated by the shareholder as a sale of his stock, which will ordinarily produce capital gain or loss, and section 334 (a) provides that the shareholders' basis for property acquired on the liquidation is its fair market value at the time of distribution. These rules, which are of long standing, led to the tax avoidance device known as the "collapsible corporation," which in its turn led,in 1950, to the enactment of what is now section 341. As will be seen, …

Tax Considerations In Selecting A Form Of Foreign Business Organization, Walter W. Brudno

Vanderbilt Law Review

The provisions of the Internal Revenue Code which are of particular relevance to the planning of foreign operations are few in number and are generally deceptively simple in phraseology. The substantive provisions consist of those sections which specify rules for determining the source of income, for calculating the credit for foreign taxes paid in respect of foreign source income, and for allowance of concessional treatment accorded Western Hemisphere Trade Corporations, United States Possessions Corporations, and China Trade Act Corporations. Measures designed to prevent tax avoidance which are of particular relevance are those which relate to acquisition of corporate control for …

Section 112(B)(6): Benefit Or Burden?, Raymond Whiteaker

Vanderbilt Law Review

The general provision in the Internal Revenue Code pertaining to the liquidation of corporations is section 115 (c). Under this section gain or loss on a liquidation is recognized to the extent that the assets received in liquidation exceed or fail to exceed the basis of the share-holder's stock. An exception to this general rule, however, is provided by section 112(b) (6) whereby a parent may liquidate a subsidiary without recognizing any gain or loss on the liquidation if the statutory requirements are met.

The nonrecognition provision first appeared in the Revenue Act of 1935 as section 110 (a).' This …