Reference no: EM131810439

Indeed, sometimes 1 plus does equal 1- at least in the merging and reorganization of corporation. As we in the news almost weekly, one company agrees to purchase another or two companies decide to merge. You get the idea. What are the tax consequence of such transaction? As we learned and revisited again and again, transaction between unrelated parties, such as two corporations, are generally fully taxable, and the parties involved will generally recognize gain or loss on these transaction as a result. Does this general rule apply to corporate mergers and reorganization as well? If not, why and how?