The target corporation must liquidate as part of the plan of reorganization unless
the IRS waives this requirement.' As a result, the shareholders of the target corporation
become shareholders in the acquiring corporation. In determining the tax consequences
to the liquidating target, the reorganization provisions govern-not the liquidation
rules of §§ 336 and 337.
* Target exchanges substantially all its assets for voting stock of Acquiring.
* Target may receive a limited amount of boot in addition to the voting stock.
* Acquiring owns the assets of both Acquiring and Target.
* Target liquidates after the transfer, distributing Acquiring Company's stock and
any retained assets.
* Target's former shareholders become shareholders in Acquiring.
Proceed to "D" Reorganization