safe harbor

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Safe harbor

Often used in risk arbitrage as a form of shark repellent. A target company acquires a business so onerously regulated that it makes the target less attractive, giving it, in effect, a safe harbor.

Safe Harbor

1. An anti-takeover measure in which a potential target company buys a subsidiary in an industry that is so strictly regulated that it makes acquiring the target company difficult and/or expensive.

2. Legal protection from a lawsuit. Regulators often apply safe harbor to some corporate actions as long as those actions are taken in good faith.

safe harbor

1. A regulation that protects individuals or corporations from the legal consequences of certain actions they undertake. For example, firms filing forecasts with the SEC have a safe harbor from individuals or businesses that use the forecasts and are subsequently damaged (that is, they lose money), as long as the forecasts were prepared in good faith.
2. A tactic in which the target of an unfriendly takeover makes itself less attractive by taking a specific action.

safe harbor

A system of rules that, if followed exactly, will provide protection from the effects of other laws. For example, in a 1031 like-kind exchange, the use of a qualified intermediary and compliance with strict IRS deadlines will result in the ability to avoid paying taxes at the time of a sale.This is the safe harbor from normal tax liability rules.There are other ways to complete a like-kind exchange without paying taxes,but the seller embarks upon those uncharted waters at its own peril. A very slight miscalculation could result in the imposition of large taxes, penalties, and interest at a later date.

References in periodicals archive ?
2005-31, superseding Notice 2003-15, provides a safe harbor for determining the finality of the adoption of a foreign-born child for purposes of the Sec.
121-3(e)(2) lists specific-event safe harbors that must occur while the taxpayer owned and used the residence.
2000-37 does not disallow exchange treatment for non-safe harbor reverse exchanges; it merely places those exchanges outside the safe harbor.
For example, the revised safe harbor would permit a level of indebtedness (the "safe harbor amount") based on the value of the corporation's assets in each identified class.
To avoid underpayment penalties in 1991, Joe must make the required annual payment that is determined by the safe harbors.
This safe harbor applies only if the change in place of employment occurs during the period of the taxpayer's ownership and use of the property as his or her principal residence.
The estimated tax penalty should be converted to an interest charge and a safe harbor should be created for all taxpayers, corporations and individuals.
OIG is also proposing clarifications to space and equipment rental, personal services, and management contracts safe harbors.
A third safe harbor requires taxpayers to allocate costs to lobbying by applying the principles of IRC section 263A's uniform capitalization regulations.
Treasury and the IRS have recently issued proposed guidance that includes safe harbors intended to limit the potential complexity and burden of complying with the TIPRA amendments.
There are specific-event safe harbors that must occur during the period the taxpayer owned and used the residence as a principal residence, under Regs.
Under these special rules, if a 401(k) plan complies with one of the two safe harbors described below for a plan year, the ADP Test will automatically be satisfied for that plan year.