Chapter 11 Bankruptcy and IRS Form 8937

Report of Organizational Actions Affecting Basis of Securities


Authored by RSM US LLP

This article first appeared in AIRA Journal.

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In a typical single-debtor Chapter 11 bankruptcy reorganization, secured creditors acquire majority ownership of the reorganized corporation pursuant to the bankruptcy plan of reorganization.  In most cases, prior equity holders receive no equity in the reorganized corporation; however, in some bankruptcy reorganizations prior equity holders receive new equity in the reorganized corporation. In either case, the reorganization may trigger a Form 8937 filing requirement for the reorganized corporation.

The first part of this article discusses the types of corporate actions generally subject to the reporting requirement for a corporation to file a Form 8937, Report of Organizational Actions Affecting Basis of Securities. The second part of the article provides the rules for filing the Form 8937 and content of the form.

Download the article to learn more about what taxpayers emerging from bankruptcy reorganizations should consider when it comes to the Form 8937 filing requirements.