DivestituresandEquitycarve-outs(英文版)(19页).pdf

Session 23 - Divestitures �Divestitures • 338(h)(10) Elections �Equity carve-outs �Spin-offs �Liquidations 15.518 Fall 2002 Session 23 Divestitures �A sale of a group of operating assets for cash, securities or some other property (a subsidiary, a division, a business segment) �Divestiture motivations: • eliminating unwanted assets (earning lower than required rates of return) • regulatory considerations (antitrust) • reversals of “mistakes” (reducing scope of activities) • cash for debt reduction (LBOs) 15.518 Fall 2002 Session 23 Tax treatment of divestitures �Almost nothing new here �For unincorporated divisions or business segments, treatment is identical to any other taxable asset sale �For subsidiaries, treatment depends on the type of transaction chosen • taxable asset acquisitions • taxable stock acquisitions • tax-free asset acquisitions • tax-free stock acquisitions 15.518 Fall 2002 Session 23 Taxable Stock Acquisitions Section 338 (h)(10) Election �If A makes a regular Section 338 election 2 levels of tax occur on the sale of T stock • a tax on the sellers gain on the sale of T stock and • a corporate-level tax on Ts deemed sale of assets to New T �If a Section 338 (h)(