Asset Basis in Acquisitive Reorganizations: General Utilities Hangover
20 Pages Posted: 4 Aug 2018 Last revised: 23 Sep 2018
Date Written: August 2, 2018
The rules that govern the tax basis and, by extension, the holding period of property received by an acquired corporation in an acquisitive reorganization are an unlovely patchwork that emerged from major changes to the tax law in 1986 and 1988. They not only fail to provide clarity but also do not reflect the fact that the acquired corporation, to the extent it engages in post-reorganization activity pursuant to the overall plan of reorganization, is in substance the agent of the acquiring corporation. Congress should amend the reorganization provisions to reflect this circumstance.
Keywords: Asset Basis, Reorganizations, Income Tax, Corporate Tax
JEL Classification: H25, K34
Suggested Citation: Suggested Citation