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Corporate Reorganizations

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Identify the following transactions:
a. C Inc. distributes all stock in its wholly-owned subsidiary, B Inc. to its shareholders.
b. C Inc. distributes all stock in its wholly-owned subsidiary, B Inc., to a 30 percent shareholder in exchange for the c. shareholder's stock.
d. C Inc. liquidates B Inc. and distributes the proceeds to its shareholders.
e. C Inc. transfers its two divisions to two new corporations, distributes the stock in the new corporations to its shareholders, and then liquidates.

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Solution Summary

Corporate Reorganization is discussed step-by-step in this solution. The response also has the sources used.

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Step 1: When C Inc distributes all stock in its wholly-owned subsidiary, B Inc to its shareholders, it is a spin-off. The shares of the spun-off subsidiary are distributed to parent shareholders. For example, Time Warner spun-off AOL.

Step 2: All the stock in its wholly-owned subsidiary is sold to a shareholder for ...

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