Per IRC § 368(a)(1)(C)

Buyer acquires substantially all the assets of Target solely in exchange for voting stock of Buyer transferred to Target

• Assumption of Target's liabilities doesn't violate
  "solely for voting stock" requirement
• Under a special rule, up to 20% of the consideration can be property other than Buyer voting stock
• But assumed liabilities count against the 20%

Target must ordinarily liquidate, distributing the stock to its shareholders

Post-acquisition, Buyer can contribute the acquired Target assets to a subsidiary controlled by Buyer

Mergers involving foreign corporations, which are ineligible for A reorganizations, often qualify as C reorganizations

Stock of Parent in control of Buyer is transferred to Target as consideration for Target's transfer of assets to Buyer

• Other C reorganization requirements must be met
• Cannot combine Parent and Buyer voting stock

M&A Tax Index