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Abstract

Acquisitive reorganizations either by consolidation or statutory merger have become a popular means for corporations with surplus cash or treasury stock to diversify their investment base. The tax treatment of cash received during such reorganizations is an often litigated and still unsettled area of the law. Such confusion is the product of inconsistent and irreconcilable case holdings and Revenue Rulings as the courts and the Internal Revenue Service have attempted to apply the myriad of judicial doctrines and intricate Code law dealing with this question to various factual situations.

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