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Maverick
Maverick, Attorney
Category: Business Law
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Experience:  20 years of professional experience
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Does anyone know what the disclosure requirements under

Customer Question

Does anyone know what the disclosure requirements under Section 368(f) reorganization that is merely a change in state charter through a domestication process? What information needs to be attached to the 1120S?
Submitted: 6 months ago.
Category: Business Law
Expert:  Maverick replied 5 months ago.

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Expert:  Maverick replied 5 months ago.

Here is the IRS bulletin that applies to your question. F reorganizations are tax-free transactions if they involve “mere” changes in a taxpayer's name or jurisdiction. Here are the six requirements that must be met:

The requirements are:
• immediately after a potential F reorganization, all stock of the resulting corporation must be distributed in exchange for stock of the transferor corporation in the potential F reorganization;
• the same person or persons own all the stock of the transferor corporation at the beginning of the potential F reorganization and all of the stock of the resulting corporation at the end in identical proportions;
• the resulting corporation doesn't hold any property or have any tax attributes immediately before the potential F reorganization;
• the transferor corporation must completely liquidate in the reorganization for federal income tax purposes;
• immediately after the potential F reorganization, no corporation other than the resulting corporation may hold property that was held by the transferor corporation immediately before the potential F reorganization; and
• immediately after the potential F reorganization, the resulting corporation may not hold property acquired from a corporation other than the transferor corporation if the resulting corporation would, as a result, succeed to and take into account the items of such other corporation described in Section 381(c).

Can you please explain what you mean by disclosure requirements?

Expert:  Maverick replied 5 months ago.

Item 9 of form 1120S states:

If the corporation was a C corporation in a prior year, or if it engaged in a tax-free reorganization with a C corporation, enter the amount of any accumulated earnings and profits (E&P) at the close of its 2015 tax year.

Customer: replied 5 months ago.
I mean are there any attachments to file according to 1.368 regs.
Customer: replied 5 months ago.
I already know the 6 requirements to qualify for 368(f) treatment - my question is now I know I qualify what do I need to disclose to IRS?
Expert:  Maverick replied 5 months ago.

The only thing that I see that form 1120S requires on this is at item 9 since it is a tax-free reorg. If the IRS wants you to prove that up, then they will ask for it.

Customer: replied 5 months ago.
Do I need to file for a new S-Corp election once I take my VA s-corp and domesticate it to FL? I think the year doesn't change and all attributes carry over. I am still confused that there is NO reporting or statement to attach. I would think the IRS would want to know you changed your state of incorporation.

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