SECTION 3. BACKGROUND

.01 Triangular reorganizations

Section 368 defines the term “reorganization.” Sections 368(a)(1)(B), 368(a)(1)(C), 368(a)(1)(G), 368(a)(2)(D), and 368(a)(2)(E) describe certain reorganizations in which P stock may be used by S as the consideration issued in exchange for T’s stock or assets, as applicable.

2006–41 I.R.B. 678 October 10, 2006

amounts may constitute subpart F income and therefore result in an income inclusion under section 951(a)(1)(A) to U.S. shareholders, within the meaning of section 951(b), of the controlled foreign corporation, subject to certain exceptions. See, e.g., section 954(c)(6).