In this video, we're going to discuss a type D acquisitive tax-free reorganization. Type D reorganizations can be either acquisitive or divisive, with divisive reorganizations being more common. Divisive reorganizations include spin-offs, which we'll talk about in another video. But in this video, we're going to focus on the acquisitive variety of type D reorganizations. Let's say there's a corporation called Chimp Children's Parties. You own all 40 shares, which means you own 100% of this corporation. Now, you decide to purchase another corporation called Chimp Sushi Chef Restaurant. This corporation, Chimp Sushi, has a shareholder named Thelma, who owns all 75 shares. To acquire Chimp Sushi, you're going to transfer 60 shares. So, Chimp Children's Parties issues an additional 60 shares, making a total of 100 shares. These additional shares are then given to Chimp Sushi. In return, Chimp Sushi is going to give you substantially all of its assets. We'll discuss what "substantially all" means shortly. For now, just know that they're giving you their assets while you're giving them 60 shares of voting stock. It's important to note that you have the option to include cash or other assets in the deal, not just voting stock. Now that you have acquired Chimp Sushi's assets, Chimp Sushi doesn't have any assets left. However, they have 60 shares of Chimp Children's Parties. What they're going to do is distribute these shares to Thelma, the sole shareholder of Chimp Sushi. After this distribution, Chimp Sushi will dissolve and no longer exist, as they have given all their assets to Chimp Children's Parties. Please bear with me if this explanation seems confusing. We will break it down further to ensure understanding.
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Qsub election tax consequences Form: What You Should Know
Subject to the provisions of IRC § 6662 and IRC § 1012, and its taxable income is not subject to taxes, under this paragraph, pursuant to the Tax-Exempt Status of Y Instructions for Form 8887 (13/2017) | Internal Revenue Service Instructions for Form 1040 (2017) | Internal Revenue Service Instructions for Form 1040-EZ (2017) | Internal Revenue Service.
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