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 effect a tax-free acquisition
, at least two corporations must be involved, one of which may be formed specifically for that purpose.
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.
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.
The first is a tax-free acquisition
that occurs outside the four-year window specified in Sec.