Rev. Rul. 68-261

Corporation X was merged under state law into corporation Y . Corporation X had conducted its business through six divisions. Immediately after the merger, corporation Y transferred the assets of each of the six divisions of corporation X to six wholly owned subsidiaries so that each business previously conducted by a separate division of corporation X was conducted by a separate subsidiary of corporation Y .

Section 368(a)(2)(C) of the Internal Revenue Code of 1954 provides in pertinent part that a transaction otherwise qualifying as a reorganization under paragraph (1)(A) of section 368(a) of the Code will not be disqualified by reason of the fact that part or all of the assets which were acquired in the transaction are transferred to a corporation controlled by the corporation acquiring such assets.

Held, the transaction described in the instant case is a reorganization within the meaning of sections 368(a)(1)(A) and (a)(2)(C) of the Code although the assets were transferred to more than one corporation controlled by the acquiring corporation. See section 1.368-2(h) of the Income Tax Regulations which provides that as used in section 368 of the Code, if the context so requires, the singular includes the plural.