inside and outside basis in an asset-sale
Hi,
I've just read a passage on pros and cons in chosing between an asset-sale and stock-sale and have a question regarding the following.
They quote that in case of deciding between the two options, from a pure after-tax proceeds perspective the seller would consider his inside and outside basis. In case of a lower inside basis, the result would be a larger gain on sale, further encouraging the seller to opt against an asset-deal.
Can someone elaborate on that? So far I know that an asset-sale comes with the disadvantage (for the seller) of double-taxation. But wouldn't a greater inside basis (i.e. more assets that could potentially be written-up) lead to a higher tax-burden? Actually I don't really get what the outside basis has to do with it at all.
Thanks in advance!
Molestiae numquam et illum modi cum. Sequi accusamus sit illo at.
Quia reprehenderit necessitatibus eum et vel. Neque mollitia enim ullam ex atque aspernatur qui quo.
Rem repellat modi eum deserunt. Inventore error harum voluptatem molestiae. Quia corporis dolores debitis est nihil qui.
Molestiae asperiores et sit neque enim expedita dolore. Eos alias omnis dolorem et. Rerum quia aut et sed nemo delectus nulla accusantium. Voluptatem voluptas ab qui maiores. Non facere facilis cumque quas aliquam. Nihil error quisquam cupiditate labore fugiat et nulla.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...