Determining whether a shareholder's gain on a corporate reorganization can qualify for stock redemption treatment is based on the reduction in the percentage of the stock held in the target corporation when compared to the percentage held in the acquiring corporation.

Question

Quizplus · Accepted Answer

The percentage reduction compares the actual shares received in the acquiring corporation to what would have been received if solely acquiring stock had been received.

Determining Whether a Shareholder's Gain on a Corporate Reorganization Can