Is opportunity to structure transaction as tax

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Reference no: EM132957215

ABC Corporation wants to acquire XYZ Corporation. ABC Corporation is a large multinational on- line retailer with a net worth of $750 Billion. XYZ is a small start-up corporation that has developed a new line of office clothes that ABC would like to own. XYZ has offered to sell the assets of XYZ for $500 Million to ABC. Alternatively, ABC has offered to exchange shares in ABC to XYZ shareholders for 80% of XYZ shares. All the rest of the XYZ shareholders want to receive cash for their shares. Since ABC has very favorable tax attributes that ABC may be able to utilize, they are interested in having XYZ survive this transaction.

Problem 1:
Is there an opportunity to structure this transaction as a tax reorganization? If so, what would XYZ and ABC have to do in order to qualify as a tax-free reorganization under:

1. IRC Sec. 368(a)(1)(A)

2. IRC Sec. 368(a)(1)(B)

3. IRC Sec. 368(a)(1)(C)

4. IRC Sec. 368(a)(1)(D)

Reference no: EM132957215

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