Unexpected Disqualification of Reorganizations Under the Internal Revenue Code by the Inadvertent Transfer of Boot

Authors

Alden H. Smith, Jr.

First Page

1534

Abstract

It is common today to read of corporations "merging" or of one corporation "buying out" another. Many of these transactions will be "reorganizations" under section 368(a) of the Internal Revenue Code. Section 368 is the current congressional resolution of two conflicting policies of tax law. On the one hand, it is desirable to promote the free mobility of capital in order that it be used in the most economical manner. On the other hand, there is the desire to prevent shareholders from using corporate reorganizations as a means of avoiding income taxes. The most common of shareholder schemes are those which attempt, through these reorganizations, to distribute corporate earnings without the payment of dividends that would otherwise be subject to the ordinary income tax.

Recommended Citation

Alden H. Smith, Jr., Unexpected Disqualification of Reorganizations Under the Internal Revenue Code by the Inadvertent Transfer of Boot, 18 Vanderbilt Law Review 1534 (1965)
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol18/iss3/32