Legal Definitions - B reorganization

A B reorganization is a type of financial restructuring of a corporation that involves exchanging voting shares with another corporation's voting shares. This type of reorganization is done to improve the tax treatment of the corporation under the Internal Revenue Code.

• Company A exchanges its voting shares for Company B's voting shares in order to improve its tax treatment.
• Company C undergoes a B reorganization by exchanging its voting shares with Company D's voting shares.

These examples illustrate how a B reorganization involves exchanging voting shares with another corporation's voting shares to improve the tax treatment of the corporation. This type of reorganization is classified under the Internal Revenue Code as a specific type of reorganization.