Taxable acquisition

Taxable acquisition

A merger or consolidation that is not a acquisition. The selling shareholders are treated as having sold their shares.

Taxable Acquisition

A merger where the value of the assets a stockholder receives at the end of the transaction is substantially different from the value of assets before the transaction began. For tax purposes, stockholders are treated as having sold their shares, and are therefore subject to capital gains taxes.
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CPAs rarely, if ever, should expect to see a taxable acquisition structured as a stock purchase.
A covered transaction is (1) a taxable acquisition by the taxpayer of assets that constitute a trade or business; (2) a taxable acquisition of an ownership interest in a business entity if immediately after the transaction, the acquirer and target are related; or (3) a reorganization under sections 368(a)(1)(A), (B), or (C) or certain reorganizations under section 368(a)(1)(D).
Start-up expenses often are incurred in connection with a taxable acquisition.
Therefore, the court concluded that two separate transactions occurred--a taxable acquisition of corporate stock by a stockholder and a tax-free reorganization.
263(a)-5 reserves on the treatment of capitalized costs incurred by a target corporation in a taxable acquisition of the target's stock where no section 338 election is made.
263(a)-5(e)(3) defines a covered transaction as a taxable acquisition of an ownership interest in a business entity (whether the taxpayer is the acquirer in the acquisition or the target of the acquisition) if, immediately after the acquisition, the acquirer and the target are related within the meaning of Sec.
Covered transactions" are defined as (i) the taxpayer's taxable acquisition of assets comprising a trade or business; (ii) the taxable acquisition of an ownership interest in another entity if the acquirer and target are related immediately thereafter; or (iii) a reorganization described in section 368(a)(1)(A), (B), or (C), or a reorganization described in section 368(a)(1)(D) in which stock or securities of the corporation to which the assets are transferred are distributed under either section 354 or 355.
A taxable acquisition of an ownership interest in a business entity (whether the taxpayer is the acquirer or the target in the acquisition) if, immediately after the acquisition, the acquirer and the target are related within the meaning of Sec.
Funds available in the taxable acquisition account will be used to acquire additional student loans through March 1, 2001 while funds in the tax-exempt acquisition account will be used to acquire additional student loans through Sept.
Example 11: A acquires TG in a taxable acquisition wherein A purchases all of TG's assets for $8 million.
On the other hand, any sale of such stock to a related party can cause the underlying acquisition to fail COI and therefore become a taxable acquisition.
The transaction is intended to be reported as a fully taxable acquisition by Capital of ILM I and will be recorded as a purchase by Capital for accounting purposes.