[Federal Register: March 2, 2004 (Volume 69, Number 41)]
[Proposed Rules]
[Page 9771-9774]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02mr04-13]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-165579-02]
RIN 1545-BB80
Corporate Reorganizations; Transfers of Assets or Stock Following
a Reorganization
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document contains proposed regulations that provide
guidance relating to the effect of certain asset and stock transfers on
the qualification of certain transactions as reorganizations under
section 368(a). This document also contains proposed regulations that
provide guidance relating to the continuity of business enterprise
requirement and the definition of a party to a reorganization. These
regulations affect corporations and their shareholders.
DATES: Written or electronic comments and requests for a public hearing
must be received by June 1, 2004.
ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-165579-02), room 5203,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-165579-02),
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue,
NW., Washington, DC. Alternatively, taxpayers may submit comments
electronically to the IRS Internet site at http://www.irs.gov/regs.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Rebecca O.
Burch, (202) 622-7550; concerning submissions and the hearing, Sonya
Cruse, (202) 622-4693 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
To quality as a reorganization under section 368 of the Internal
Revenue Code, a transaction must satisfy certain statutory requirements
and nonstatutory requirements, including continuity of business
enterprise (COBE). Section 368(a)(2)(C) provides that a transaction
otherwise qualifying as a reorganization under section 368(a)(1)(A),
(B), (C), or (G) will not be disqualified by reason of the fact that
part or all of the acquired assets or stock are transferred to a
corporation controlled by the acquiring corporation.
Section 354(a) provides that, in general, no gain or loss shall be
recognized if stock or securities in a corporation a party to a
reorganization are, in pursuance of the plan of reorganization,
exchanged solely for stock or securities in such corporation or in
another corporation a party to the reorganization. Section 368(b)
provides that the term ``a party to a reorganization'' includes a
corporation resulting from a reorganization, and both corporations, in
the case of a reorganization resulting from the acquisition by one
corporation of stock or properties of another. Section 368(b) further
provides that, in the case of a reorganization qualifying under section
368(a)(1)(B) or (C), if the stock exchanged for the stock or properties
is stock of a corporation which is in control of the acquiring
corporation, the term ``a party to a reorganization'' includes the
corporation so controlling the acquiring corporation. In the case of a
reorganization qualifying under section 368(a)(1)(A), (B), (C), or (G)
by reason of section 368(a)(2)(C), the term ``a party to a
reorganization'' includes the corporation controlling the corporation
to which the acquired assets or stock are transferred. In the case of a
reorganization qualifying under section 368(a)(1)(A) or (G) by reason
of section 368(a)(2)(D), the term ``a party to a reorganization''
includes the controlling corporation. Finally, in the case of a
reorganization qualifying under section 368(a)(1)(A) by reason of
section 368(a)(2)(E), the term ``a party to a reorganization'' includes
the controlling corporation.
On January 28, 1998, final regulations providing guidance regarding
the COBE requirement, the definition of ``a party to the
reorganization,'' and the effect of certain transfers of acquired
assets or stock on the qualification of a transaction as a
reorganization under section 368(a)(1)(A), (B), (C), or (G) were
published in the Federal Register (63 FR 4174). Sections 1.368-1(d) and
1.368-2(f) and (k) were among those regulations.
Section 1.368-1(d) generally provides that, for a transaction to
satisfy the COBE requirement, the issuing corporation must either
continue a significant historic business of the target corporation or
use a significant portion of the target corporation's assets in a
business. For this purpose, the term issuing corporation generally
means the acquiring corporation, but, in the case of a triangular
reorganization, it means the corporation in control of the acquiring
corporation. In addition, the issuing corporation is treated as holding
all of the businesses and assets of all of the members of the qualified
group. For this purpose, the qualified group is one or more chains of
corporations connected through stock ownership with the issuing
corporation, but only if the issuing corporation owns directly stock
meeting the requirements of section 368(c) in at least one other
corporation, and stock meeting the requirements of section 368(c) in
each of the corporations (except the issuing corporation) is owned
directly by one of the other corporations.
Section 1.368-2(f) provides that the term ``a party to a
reorganization'' includes a corporation resulting from a
reorganization, and both corporations in a transaction qualifying as a
reorganization where one corporation acquires stock or properties of
another corporation. In the case of a triangular reorganization, a
corporation controlling an acquiring corporation is a party to the
reorganization when the stock of such controlling corporation is used
in the acquisition of properties. Section 1.368-2(f) further provides
that, if a transaction otherwise qualifies as a reorganization, a
corporation remains a party to the reorganization even though stock or
assets acquired in the reorganization are transferred in a transaction
described in Sec. 1.368-2(k).
Section 1.368-2(k) provides that, except as otherwise provided, a
transaction otherwise qualifying as a reorganization under section
368(a)(1)(A), (B), (C), or (G) (where the requirements of sections
354(b)(1)(A) and (B) are met) will not be disqualified
[[Page 9772]]
by reason of the fact that part or all of the assets or stock acquired
in the transaction are transferred or successively transferred to one
or more corporations controlled in each transfer by the transferor
corporation. For this purpose, a corporation is a controlled
corporation if the transferor corporation owns stock of such
corporation constituting control within the meaning of section 368(c).
Furthermore, a transaction qualifying under section 368(a)(1)(A) by
reason of application of section 368(a)(2)(E) is not disqualified by
reason of the fact that part or all of the stock of the surviving
corporation is transferred or successively transferred to one or more
corporations controlled in each transfer by the transferor corporation,
or because part or all of the assets of the surviving corporation or
the merged corporation are transferred or successively transferred to
one or more corporations controlled in each transfer by the transferor
corporation. Again, for this purpose a corporation is controlled by the
transferor corporation if the transferor corporation owns stock of such
corporation constituting control within the meaning of section 368(c).
The preamble to the January 28, 1998, regulations explains that
assets or stock acquired in certain reorganizations may be transferred
among members of a qualified group, and in certain cases to
partnerships, without preventing the reorganization from satisfying
COBE. It also states that the IRS and Treasury Department believe that
the COBE requirements adequately address the remote continuity of
interest issues raised in Gorman v. Commissioner, 302 U.S. 82 (1937),
and Helvering v. Bashford, 302 U.S. 454 (1938), and, therefore, that
the final regulations do not separately articulate rules for remote
continuity. The preamble also states that Sec. 1.368-1(d), being
limited to a discussion of the COBE requirement, does not address
satisfaction of the explicit statutory requirements of a
reorganization, which is the subject of Sec. 1.368-2. Finally, the
preamble states that no inference is to be drawn as to whether
transactions not described in Sec. 1.368-2(k) otherwise qualify as
reorganizations.
In Rev. Rul. 2001-1 C.B. 1290, and Rev. Rul. 2002-85, 2002-52
I.R.B. 986, the IRS addressed the effect of certain transfers not
described in Sec. 1.368-2(k) on certain transactions that otherwise
qualify as reorganizations. In Rev. Rul. 2001-24, the IRS considered
whether a transfer of the stock of the acquiring corporation to a
corporation wholly owned by the issuing corporation following a
transaction that otherwise qualified as a reorganization under section
368(a)(1)(A) by reason of section 368(a)(2)(D) (a forward triangular
merger) prevented the transaction from qualifying as such. The IRS
ruled that the transfer of stock of the acquiring corporation did not
cause the issuing corporation to be treated as not in control of the
acquiring corporation for purposes of section 368(a)(2)(D), and did not
cause the issuing corporation to fail to be treated as a party to the
reorganization. In arriving at these conclusions, the ruling notes that
section 368(a)(2)(C) and Sec. 1.368-2(k) do not specifically address
the facts of the ruling and section 368(a)(2)(C) does not preclude the
transaction from qualifying as a reorganization. The ruling states
that, by its terms, section 368(a)(2)(C) is a permissive, rather than
an exclusive or restrictive, section. therefore, the transfer of
acquiring corporation stock to the issuing corporation's wholly owned
subsidiary did not prevent the transaction from qualifying as a forward
triangular merger.
In Rev. Rul. 2002-85, the IRS considered whether an acquiring
corporation's transfer of acquired assets to a subsidiary controlled by
the acquiring corporation would prevent the acquiring corporation's
acquisition of those assets from qualifying as a reorganization under
section 368(a)(1)(D). After noting that section 368(a)(2)(C) is
permissive rather than exclusive or restrictive, the ruling reasons
that, because Sec. 1.368-2(k) restates and interprets section
368(a)(2)(C), Sec. 1.368-2(k) also should be viewed as permissive and
not exclusive or restrictive. The ruling concludes that the absence of
section 368(a)(1)(D) from Sec. 1.368-2(k) does not prevent a
corporation from remaining a party to a reorganization even if the
acquired stock or assets are transferred to a controlled subsidiary.
The ruling states that, like reorganizations under sections
368(a)(1)(A) and 368(a)(1)(C), reorganizations under section
368(a)(1)(D) are asset reorganizations. In reorganizations under
sections 368(a)(1)(A) and reorganizations under section 368(a)(1)(C),
the original transferee is treated as a party to a reorganization, even
if the acquired assets are transferred to a controlled subsidiary of
the original transferee. Because the differences between
reorganizations under section 368(a)(1)(D) on the one hand and
reorganizations under sections 368(a)(1)(A) and (C) on the other hand
do not warrant treating the original transferee in a transaction that
otherwise satisfies the requirements of a reorganization under section
368(a)(1)(D) differently from the original transferee in a
reorganization under section 368(a)(1)(A) or (C) for purposes of
section 368(b), the ruling concludes that the original transferee in a
transaction that otherwise satisfies the requirements of a
reorganization under section 368(a)(1)(D) is treated as a party to the
reorganization, notwithstanding the original transferee's transfer of
acquired assets to a controlled subsidiary of the original transferee.
The ruling concludes that the transaction qualifies as a reorganization
under section 368(a)(1)(D).
Explanation of Provisions
As described above, in the regulations under section 368 and in
revenue rulings, the IRS and Treasury Department have considered the
effect of transfers of assets or stock to controlled corporations on
the qualification of a transaction as a reorganization in a variety of
situations not addressed by section 368(a)(2)(C). In each of these
cases, the IRS and Treasury Department have concluded that the
transfers did not cause the transaction to fail to qualify as a
reorganization. These conclusions reflect the fact that, in all of the
situations considered, the transactions, in form, satisfy the statutory
requirements of a reorganization and, in substance, constitute
readjustments of continuing interests in the reorganized business in
modified corporate form. None of the transactions involve the transfer
of the acquired stock or assets to a ``stranger,'' a result
inconsistent with reorganization treatment. H.R. Rep. No. 83-1337, A134
(1954).
The IRS and Treasury believe that certain transfers of stock and
assets to controlled corporations are consistent with reorganization
treatment, even though in some cases the transfers involve a type of
reorganization not included in section 368(a)(2)(C). The effect of
transferring stock or assets to a controlled corporation on the
qualification of a transaction as a reorganization should not depend on
the specific reorganization provision at issue. Given that section
368(a)(2)(C) was intended to be permissive rather than exclusive with
respect to certain transfers of stock or assets to a controlled
corporation following a transaction that would qualify as a
reorganization without regard to the transfer, the IRS and Treasury
believe it is appropriate to extend its principles to certain transfers
of stock and assets after all types of reorganizations.
Accordingly, these regulations propose to amend Sec. 1.368-2(k) to
provide that a transaction otherwise
[[Page 9773]]
qualifying as a reorganization under section 368(a) will not be
disqualified as a result of the transfer or successive transfers to one
or more corporations controlled in each transfer by the transferor
corporation of part or all of (i) the assets of any party to the
reorganization, or (ii) the stock of any party to the reorganization
other than the issuing corporation. In addition, these proposed
regulations include amendments to the COBE regulations under Sec.
1.368-1(d) and amendments to the definition of a party to a
reorganization under Sec. 1.368-2(f) that reflect Sec. 1.368-2(k) as
proposed.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in Executive Order
12866. Therefore, a regulatory assessment is not required. It has also
been determined that section 553(b) of the Administrative Procedure Act
(5 U.S.C. chapter 5) does not apply to these regulations, and, because
these regulations do not impost a collection of information on small
entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not
apply. Pursuant to section 7805(f) of the Internal Revenue Code, this
notice of proposed rulemaking will be submitted to the Chief Counsel
for Advocacy of the Small Business Administration for comment on its
impact on small businesses.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written (a signed original and 8
copies) or electronic comments that are submitted timely to the IRS.
The IRS and Treasury Department request comments on the clarity of the
proposed rules and how they can be made easier to understand. All
comments will be available for public inspection and copying. A public
hearing will be scheduled if requested in writing by any person that
timely submits written comments. If a public hearing is scheduled,
notice of the date, time, and place for the public hearing will be
published in the Federal Register
Drafting Information
The principal author of these proposed regulations is Rebecca O.
Burch of the Office of Associate Chief Counsel (Corporate). However,
other personnel from the IRS and Treasury Department participated in
their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
1. The authority citation for part 1 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 * * *.
2. Section 1.368-1 is amended as follows:
1. Paragraph (d)(4)(i) is redesignated as paragraph (d)(4)(i)(A)
and revised.
2. New paragraph (d)(4)(i)(B) is added.
3. Paragraph (d)(5), introductory text, is redesignated as
paragraph (d)(5)(i), and revised.
4. In newly designated paragraph (d)(5)(i), Examples, 7, 8, 9, 10,
11, and 12 are redesignated as Examples 8, 9, 10, 11, 12, and 13,
respectively.
5. In newly designated paragraph (d)(5)(i), the first sentence in
redesignated Examples 9, 10, and 12 is revised.
6. In newly designated paragraph (d)(5)(i), a new Example 7 is
added.
7. New paragraph (d)(5)(ii) is added.
The revisions and additions read as follows:
Sec. 1.368-1 Purpose and scope of exception of reorganization
exchanges.
* * * * *
(d) * * *
(4) * * *
(i) Businesses and assets of members of a qualified group--(A) In
general. The issuing corporation is treated as holding all of the
businesses and assets of all of the members of the qualified group, as
defined in paragraph (d)(4)(ii) of this section.
(B) Special rule. The issuing corporation is treated as holding all
of the businesses and assets of the surviving corporation after a
reorganization that otherwise satisfies the requirements of a reverse
triangular merger (as defined in Sec. 1.358-6(b)(2)(iii)), the
acquired corporation after a reorganization that otherwise satisfies
the requirements of section 368(a)(1)(B), and the acquiring corporation
after a reorganization that otherwise satisfies the requirements of a
forward triangular merger (as defined in Sec. 1.358-6(b)(2)(i)), a
triangular B reorganization (as defined in Sec. 1.358-6(b)(2)(iv)), a
triangular C reorganization (as defined in Sec. 1.358-6(b)(2)(ii)), or
a reorganization under section 368(a)(1)(G) by reason of section
368(a)(2)(D), provided that members of the qualified group own, in the
aggregate, stock of the surviving, or acquiring corporation meeting the
requirements of section 368(c). This paragraph (d)(4)(i)(B) applies to
transactions occurring after the date this regulations are published as
final regulations in the Federal Register.
* * * * *
(5) Examples. (i) The following examples illustrate this paragraph
(d). All the following corporations have only one class of stock
outstanding.
* * * * *
Example 7. (i) Facts. The facts are the same as in Example 6,
except that, instead of P acquiring the assets of T, HC acquires all
of outstanding stock of T in exchange solely for voting stock of P.
In addition, as part of the plan of reorganization, HC transfers 10
percent of the stock of T to each of subsidiaries S-1 through S-10.
Finally, T will continued to operate an auto parts distributorship.
Without regard to whether the transaction satisfies the COBE
requirement, the transaction qualifies as a triangular B
reorganization.
(ii) Continuity of business enterprise. Under paragraph
(d)(4)(i)(B) of this section, P is treated as holding all of the
assets and conducting the business of T because S-1 through S-10,
members of the qualified group, own stock of T meeting the
requirements of section 368(c). Therefore, the COBE requirement of
paragraph (d)(1) of this section is satisfied because P is treated
as continuing T's business.
* * * * *
Example 9. * * * (i) Facts. The facts are the same as Example 8,
except that S-3 transfers the historic T business to PRS in exchange
for a 1 percent interest in PRS.
* * * * *
Example 10. * * * (i) Facts. The facts are the same as Example
8, except that S-3 transfers the historic T business to PRS in
exchange for a 33\1/3\ percent interest in PRS, and no member of P's
qualified group performs active and substantial management functions
for the ski boot business operated in PRS.
* * * * *
Example 12. * * * (i) Facts. The facts are the same as Example
11, except that S-1 transfers all the T assets to PRS and P and X
each transfer cash to PRS in exchange for partnership interests. * *
*
* * * * *
(ii) Effective dates. Paragraph (d)(5) Example 6, and Example 8
through Example 13 apply to transactions occurring after January 28,
1998, except that they do not apply to any transaction occurring
pursuant to a written agreement which is binding on January 28, 1998,
and at all times thereafter. Paragraph (d)(5) Example 7 applies to
transactions occurring after the date these regulations are published
as final regulations in the Federal Register.
* * * * *
[[Page 9774]]
3. Section 1.368-2 is amended by:
1. Adding three sentences at the end of paragraph (f).
2. Revising paragraph (k).
The additions and the revision read as follows:
Sec. 1.368-2 Definition of terms.
* * * * *
(f) * * * If a transaction otherwise qualifies as a reorganization
under section 368(a)(1)(B) or as a reverse triangular merger (as
defined in Sec. 1.358-6(b)(2)(iii)), the target corporation (in the
case of a transaction that otherwise qualifies as a reorganization
under section 368(a)(1)(B)) or the surviving corporation (in the case
of a transaction that otherwise qualifies as a reverse triangular
merger) remains a party to the reorganization even though its stock or
assets are transferred in a transaction described in paragraph (k) of
this section. If a transaction otherwise qualifies as a forward
triangular merger (as defined in Sec. 1.358-6(b)(2)(i)), a triangular
B reorganization (as defined in Sec. 1.358-6(b)(2)(iv)), a triangular
C reorganization (as defined in Sec. 1.358-6(b)(2)(ii)), or a
reorganization under section 368(a)(1)(G) by reason of section
368(a)(2)(D), the acquiring corporation remains a party to the
reorganization even though its stock is transferred in a transaction
described in paragraph (k) of this section. The two preceding sentences
apply to transactions occurring after the date these regulations are
published as final regulations in the Federal Register.
* * * * *
(k) Certain transfers of assets or stock in reorganizations--(1)
General rule. A transaction otherwise qualifying as a reorganization
under section 368(a) shall not be disqualified as a result of the
transfer or successive transfers to one or more corporations controlled
in each transfer by the transferor corporation in part or all of--
(i) The assets of any party to the reorganization; or
(ii) The stock of any party to the reorganization other than the
issuing corporation (as defined in Sec. 1.368-1(b)).
(2) Control. Control is defined under section 368(c).
(3) Examples. The following examples illustrate the application of
this paragraph (k). P is the issuing corporation and T is the target
corporation. P has only one class of stock outstanding. The examples
are as follows:
Example 1. Transfers of acquired assets to controlled
corporations after a reorganization under section 368(a)(1)(C). (i)
Facts. T operates a bakery that supplies delectable pastries and
cookies to local retail stores. The acquiring corporate group
produces a variety of baked goods for nationwide distribution. P
owns 80 percent of the stock of S-1. Pursuant to a plan of
reorganization, T transfers all of its assets to S-1 solely in
exchange for P stock, which T distributes to its shareholders. S-1
owns 80 percent of the stock of S-2, and S-2 owns 80 percent of the
stock of S-3, which also makes and supplies pastries and cookies.
Pursuant to the plan of reorganization, S-1 transfers all of the T
assets to S-2, and S-2 transfers all of the T assets to S-3.
(ii) Analysis. Under this paragraph (k), the transaction, which
otherwise qualifies as a reorganization under section 368(a)(1)(C),
is not disqualified by reason of the fact of the successive
transfers of all of the T assets to S-2, and from S-2 to S-3
because, in each transfer, the transferee corporation is controlled
by the transferor corporation.
Example 2. Transfers of acquired assets to controlled
corporations after a reorganization under section 368(a)(1)(D). (i)
Facts. The facts are the same as Example 1 except that P also owns
100 percent of the stock of T before the transaction, and T
transfers all of its assets to S-1 solely in exchange for S-1 stock,
which T distributes to P.
(ii) Analysis. Under this paragraph (k), the transaction, which
otherwise qualifies as a reorganization under section 368(a)(1)(D),
is not disqualified by reason of the fact of the successive
transfers of all of the acquired assets from S-1 to S-2, and from S-
2 to S-3 because, in each transfer, the transferee corporation is
controlled by the transferor corporation.
Example 3. Transfer of acquiring stock to controlled corporation
after a reorganization under section 368(a)(1)(A). (i) Facts. The
facts are the same as Example 1 except that P owns 80 percent of the
stock of S-4 and, pursuant to the plan of reorganization, S-1
acquires all of the T assets as a result of the merger of T with and
into S-1. In addition, in the merger, the T shareholders receive
consideration 50 percent of which is stock of P and 50 percent of
which is cash. Finally, pursuant to the plan of reorganization, P
transfers all of the S-1 stock to S-4.
(ii) Analysis. Under this paragraph (k), the transaction, which
otherwise qualifies as a reorganization under section 368(a)(1)(A)
by reason of section 368(a)(2)(D), is not disqualified by the
transfer of all of the S-1 stock to S-4 because, in the transfer,
the transferee corporation is controlled by the transferor
corporation.
Example 4. Transfers of acquired stock to controlled
corporations after a reorganization under section 368(a)(1)(B). (i)
Facts. The facts are the same as Example 1 except that S-1 acquires
all of the T stock rather than the T assets, and as part of the plan
of reorganization, S-1 transfers 50 percent of the T stock to S-2,
and S-2 transfers that T stock to S-3.
(ii) Analysis. Under this paragraph (k), the transaction, which
otherwise qualifies as a reorganization under section 368(a)(1)(B),
is not disqualified by the successive transfers of part of the
acquired stock from S-1 to S-2, and from S-3 because, in each
transfer, the transferee corporation is controlled by the transferor
corporation.
Example 5. Transfers of acquiring corporation stock to
controlled corporations after a reorganization under section
368(a)(1)(B). (i) Facts. The facts are the same as Example 4 except
that P owns 80 percent of the stock of S-4, and S-4 owns 80 percent
of the stock of S-5, and, as part of the plan of reorganization,
following the acquisition of T stock by S-1, P transfers 10 percent
of its S-1 stock to S-4, and S-4 transfers that S-1 stock to S-5.
(ii) Analysis. Under this paragraph (k), the transaction, which
otherwise qualifies as a reorganization under section 368(a)(1)(B),
is not disqualified by reason of the successive transfers of S-1
stock to S-4, and from S-4 to S-5 because, in each transfer, the
transferee corporation is controlled by the transferor corporation.
Example 6. Transfer of acquired stock to a partnership. (i)
Facts. The facts are the same as in Example 4. However, as part of
the plan of reorganization, S-2 and S-3 form a new partnership, PRS.
Immediately thereafter, S-3 transfers all of its T stock to PRS in
exchange for an 80 percent partnership interest, and S-2 transfers
cash to PRS in exchange for a 20 percent partnership interest.
(ii) Analysis. This paragraph (k) describes the successive
transfers of T stock to S-3, but does not describe S-3's transfer of
T stock to PRS. Therefore, the characterization of this transaction
must be determined under the relevant provisions of law, including
the step transaction doctrine. See Sec. 1.368-1(a). The transaction
fails to meet the control requirement of a reorganization described
in section 368(a)(1)(B) because immediately after the acquisition of
the T stock, the acquiring corporation does not have control of T.
(4) Effective date. This paragraph (k) applies to transactions
occurring after the date these regulations are published as final
regulations in the Federal Register.
Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 04-4483 Filed 3-1-04; 8:45 am]
BILLING CODE 4830-01-M