On Sept. 21, the IRS and Treasury issued final regulations under
Section 368(a)(1)(F), which are effective for transactions entered
into on or after that date.
The final regulations (T.D. 9739) modify the August 2004
proposed regulations (REG-106889-04), which provided guidance on
"F' reorganizations. Such reorganizations involve a mere
change in identity, form, or place or organization of a single
corporation. The proposed regulations provided four requirements
for a valid F reorganization.
The first requirement is that resulting corporation stock is
distributed in exchange for transferor corporation stock (e.g. this
effectuates the mere change in form). The second requirement is an
identity of stock ownership. The third requirement is that the
resulting corporation cannot hold any assets or have any tax
attributes immediately before the "potential F
reorganization." The fourth requirement is that the transferor
corporation must liquidate.
