Common use of Liquidations and reorganizations Clause in Contracts

Liquidations and reorganizations. An S corporation acquiring the assets of another S corporation in a trans- action to which section 381(a) applies will succeed to and merge its AAA (whether positive or negative) with the AAA (whether positive or negative) of the distributor or transferor S corpora- tion as of the close of the date of dis- tribution or transfer. Thus, the AAA of the acquiring corporation after the transaction is the sum of the AAAs of the corporations prior to the trans- action.