Which of the following statements does not describe a requirement that must be met in a tax-deferred forward triangular merger?

Question

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The requirement that the target corporation shareholders must receive voting stock in the acquiring corporation is not a condition for a tax-deferred forward triangular merger. The other options are requirements for this type of merger. The continuity of business enterprise test ensures that the post-merger entity continues to operate the same business as before the merger. The acquirer must hold substantially all of the target corporation's properties to ensure that the transaction is a merger rather than a sale of assets. The 40 percent continuity of interest test ensures that the target corporation shareholders have a significant ownership interest in the acquiring corporation.

Which of the Following Statements Does Not Describe a Requirement