What is an f reorganization?

An F reorganization, also known as a "mere change" or "F dirty reorganization," is a type of tax-free reorganization under section 368(a)(1)(F) of the Internal Revenue Code. This type of reorganization involves a recapitalization or change in the form of a corporation, where the assets and liabilities of the corporation remain the same before and after the reorganization.

In an F reorganization, the shareholders of the target corporation exchange their stock for stock in the acquiring corporation, or for a combination of stock and securities. The shareholders must hold a significant amount of the acquiring corporation's stock after the reorganization for it to qualify as a tax-free transaction.

One of the key benefits of an F reorganization is that it allows for a tax-free transfer of assets, as long as certain requirements are met. This can help companies consolidate or streamline their operations without incurring additional tax liabilities.

It is important to note that F reorganizations can be complex and involve strict compliance with IRS regulations. It is recommended to consult with tax and legal professionals when considering an F reorganization.