business law currents tax …（商法电流税u2026）.pdf

BUSINESS LAW CURRENTS TAX CONSIDERATIONS IN MA TRANSACTIONS JANUARY 24, 2012 liquidation of the corporation, there will be two levels of taxation – that is, at the corporate and shareholder levels. Accordingly, in terms of tax DAVID BURTON (AKIN GUMP STRAUSS HAUER FELD LLP) AND consequences, sellers generally prefer stock sales. ANNE LEVIN-NUSSBAUM (ATTORNEY) The corollary to the seller’s recognition of gain is that the buyer The tax considerations involved in a business acquisition vary acquires the various assets with bases equal to their fair market values, depending on the form of transaction and the types of entities involved. a so-called “step up” in basis. The buyer takes the assets with full basis The structure of the transaction will affect the tax consequences arising and new holding periods, and where applicable will get the benefit from the deal, be it taxable gain or matters relating to tax attributes of depreciation deductions, thereby reducing the buyer’s taxes going such as net operating loss carryovers (“Net Operating Losses”). As forward. Thus, from a tax perspective, this structure would generally be there is often more than one way to structure a transaction to achieve preferable to a buyer. the parties’ business goals, tax advice early in the negotiation process can yield meaningful economic benefits. This article will review There are also commercial reasons for using an asset purchase. the typical transaction structures used to acquire business and the The purchaser may want to pick and choose specific assets to buy, general tax consequences to the parties under each structure. It will