Stock Acquired Through a Consolidation or Transfer

What this video covers

• How the exchange ratio determines how many shares a target shareholder receives in a surviving company
• Why the holding period of old shares carries over (tacks on) to new shares in a qualifying tax-free reorganization
• The three types of tax-free reorganizations: Type A statutory merger, Type B stock-for-stock, and Type C stock-for-assets
• Why Type B reorganizations allow solely voting stock with absolutely zero boot permitted
• How boot triggers partial gain recognition up to the boot amount, and why loss is never recognized in any reorganization exchange
• What the reorganization rule actually mandates (registration) versus what state corporate law or the charter mandates (shareholder vote)
• How spinoffs and mergers differ in direction, shareholder action, cost basis treatment, and loss applicability