What Is an F-Reorganization? The Tax-Smart Way to Sell Your Florida Business
The F-reorganization can sound intimidating and overly technical, but at its core, it’s just a way to “change the wrapper” on your company to make the sale more tax-efficient for both the buyer and seller. Here’s how I’d explain it if I were the senior attorney walking a colleague and their client through it in a conference room. What is an F-Reorganization: The Big Picture An F-reorganization is simply a “legal reshuffle” allowed under Section 368(a)(1)(F) of the Internal Revenue Code. It’s officially called a “mere change in identity, form, or place of organization of one corporation.” Put bluntly: you’re not changing what your business does or its business operations. You’re just changing what it looks like on paper so the buyer gets the tax advantages of an asset purchase, and you, the seller, still get the tax advantages of a stock sale. This tax efficiency makes F reorganizations offer tremendous value for both parties. F-Reorg Step-by-Step in Plain English Here’s what typi...