Question
Please draft a tax memo explaining whether one or both of the two acquisition transactions qualify as a non-taxable reorganization.
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Tax-free M&A transactions are considered "reorganizations" and are similar to taxable deals except that in reorganizations the acquirer uses its stock as a significant portion of the consideration paid to the seller rather than cash or debt.Reorganizations, while not generally taxable at the entity level, are not completely tax-free to the selling shareholders. Reorganization is immediately taxable to the target's shareholders to the extent they receive non-qualifying consideration, or "boot"....