Tax free acquisition

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Tax free acquisition

A merger or consolidation in which (1) the acquirer's tax basis on each asset whose ownership is transferred in the transaction is generally the same as the acquiree's, and (2) each seller who receives only stock does not have to pay any tax on the gain realized until the shares are sold.

Tax Free Acquisition

A merger where the value of the assets a stockholder receives at the end of the transaction is substantially the same as the value of assets before the transaction began. For tax purposes, stockholders are treated as having kept their old shares, and are therefore not subject to capital gains taxes.
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It is common for key employee shareholders to retain an interest in the target business following either a taxable or tax-free acquisition.
The tax-free acquisition of other accounting firms or their separately incorporated divisions; e.
The current law allows tax-free acquisition of a subsidiary or parent corporations in an exchange of stock of the acquiring company.
To the extent that Pulaski Financial shares are received, the exchange is expected to qualify as a tax-free acquisition to CWE stockholders.
During the conversation, the member explains how to structure the transaction so it will be a tax-free acquisition.
During the call, the member explains how the transaction should be structured so it will qualify as a tax-free acquisition.
81-70 gives a taxpayer alternatives for determining carryover tax basis in "B" reorganizations, the full scope of this revenue procedure may not have been fully appreciated until another form of tax-free acquisition fell under its jurisdiction.
37) The final regulations provide no guidance, however, regarding the tax treatment of costs capitalized in connection with any tax-free acquisition, or the target's costs in a taxable stock acquisition.
However, in a tax-free acquisition or a deemed sale under Sec.
INDIANAPOLIS, June 9 /PRNewswire/ -- Standard Management Corporation ("SMC") (Nasdaq: SMAN) today announced the signing of a definitive merger agreement providing for a tax-free acquisition of Dixie National Corp.
For example, spin-offs used to facilitate a taxable or tax-free acquisition, a public offering or simply to create an attractive structure to provide equity compensation to key employees of a particular business, could potentially cause corporate-level taxes.
2) Often, corporations undertake such spinoffs to dispose of unwanted businesses in preparation for a tax-free acquisition by another corporation.