the most-favorable tax way for the acquirer?|My homework helper

Posted: March 9th, 2023

What are the tax consequences of acquisitions regarding: (a) most-favorable tax way for the selling shareholder and (b) the most-favorable tax way for the acquirer?

SOLUTION

The tax consequences of acquisitions can vary depending on the specific details of the transaction and the applicable tax laws. However, in general, there are several factors that can impact the most favorable tax way for the selling shareholder and the acquirer. Most-favorable tax way for the selling shareholder. Stock Sale vs. Asset Sale: A stock sale typically results in capital gains treatment for the selling shareholder, while an asset sale may result in a combination of ordinary income and capital gains. If the selling shareholder has a low basis in the stock, a stock sale may be more favorable from a tax perspective.