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368(a). Respondent determined in the statutory notice of
deficiency that both the Bender and Mosby transactions were
taxable. Petitioner asserts that the Bender and Mosby
transactions qualify for tax-free treatment as reverse triangular
mergers under section 368(a)(2)(E) or, alternatively, as “B”
reorganizations under section 368(a)(1)(B). Substantially the
same reasons support petitioner’s position that the Bender and
Mosby exchanges qualify as tax-free reorganizations.
Respondent’s reasons for disallowing tax-free treatment of
the Bender transaction are nearly identical to respondent’s
reasons for disallowing tax-free treatment of the Mosby
transaction. As to the Mosby exchange only, respondent asserts
an additional reason to disqualify that transaction as a reverse
triangular merger. Respondent contends that Mosby’s transfers of
assets to Times Mirror prior to Times Mirror’s transfers of Mosby
stock present an alternative and independent ground for finding
that the Mosby transaction did not meet the “substantially all”
requirement of section 368(a)(2)(E).
In December 2004, the Bender transaction was tried. The
parties agreed that, because of the similarities between the
Bender and Mosby transactions and the issues for trial, a trial
of the Bender transaction could obviate the need for or limit the
scope of any trial of the Mosby transaction. The parties agreed
that, if the Bender transaction fails to qualify as a tax-free
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Last modified: May 25, 2011