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Abstract: 

The Internal Revenue Code’s provisions for tax-free reorganizations generally presuppose that the corporate entities involved in these transactions issue stock. Judicially developed doctrines like the continuity of interest requirement further entrench this stock-centric perspective. But the ownership interests in nonstock banking institutions challenge the conventional rules. As a result, nonstock institutions engaged in reorganization transactions experience inconsistent and unprincipled tax results. The authors consider relevant authorities, note transaction types that appear blessed or doomed, and comment on the treatment of nonstock interests going forward.

Keywords: mutual bank; nonstock corporation; reorganization; tax-free merger; nonacquisitive reorganization; continuity of proprietary interest

Affiliations:  1: Alston & Bird, LLP; 2: Alston & Bird, LLP.