Because a purchaser can use a target’s NOL carry forwards to offset the ordinary and capital gain and recapture tax on the sale of the target’s assets, it has been argued that this reduces the cost of achieving a stepped-up basis in assets and makes it advantageous for the purchaser to acquire the target. Do you agree with this argument?
Answer to relevant QuestionsWhat types of transactions generate tax- deductible goodwill? How many acquisitions of freestanding C corporations, as a general rule, give rise to tax- deductible goodwill? Walkers is planning to acquire Cayman Bank, a freestanding C corporation, in expectation that new management can be brought in to achieve substantial operating efficiencies. You have been retained to advise Walkers on how to ...Cambridge, Inc., is an S corporation. Courtesan, Inc., wants to acquire Cambridge for cash. Cambridge’s shareholders have a tax basis in their stock of $ 5,000 (they have held the stock for 5 years), and Cambridge has ...What are the primary tax and nontax costs of a: a. Section 368 A tax- free reorganization b. Section 368 B tax- free reorganization c. Section 368 C tax- free reorganization d. Section 351 tax- free acquisition Name four requirements for a spin-off to qualify as tax- free.
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