Document Type
Article
Publication Title
Virginia Tax Review
Publication Date
2007
ISSN
0735-9004
Page Number
23
Keywords
commercial law, taxation, shareholders, corporate reorganization
Disciplines
Commercial Law | Law | Tax Law
Abstract
This article examines the taxation of human shareholders in the case of mergers and acquisitions. Currently, the relevant law is extraordinarily complex, utterly inconsistent, and in many instances arguably unfair. There are really only two plausible ways to cure these ills. The first would involve moving to a tax system with more fulsome gain recognition, most likely in the form of mark-to-market taxation. This option is not in my opinion feasible (either technically or what is perhaps more important, politically). Accordingly, the second potential cure, moving to a tax system with less gain recognition, merits attention. In this article, I propose such a tax system. In particular, under my proposal, a human shareholder whose stock is sold or exchanged pursuant to a merger or acquisition would be entitled to nonrecognition treatment so long as either (1) he receives stock in the acquiring corporation or (2) he involuntarily receives consideration other than stock in the acquiring corporation but promptly and appropriately reinvests such consideration
Recommended Citation
Herwig J. Schlunk,
Rationalizing the Taxation of Reorganizations and Other Corporate Acquisitions, 27 Virginia Tax Review. 23
(2007)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/439