18 Jul Tax Structures in M&A Transactions
Posted at 15:17h
in Insights
Many private-equity transactions are structured as an equity purchase (e.g., stock) rather than as a direct asset purchase. Sellers often prefer an equity sale because they expect to receive preferential capital gain treatment on any resulting gain and typically require a gross-up for any ordinary income tax liability on a deemed asset sale. At the same time, buyers generally prefer not to buy stock, since they do not receive a step-up in the tax basis of the corporation’s assets.
Read about the requirements, limitations, concerns, and issues of some common tax structures in M&A transactions with our downloadable resource.