So I know that in an asset sale you can write up your assets' tax basis, allowing tax savings in the future. Does this also apply to write-downs? For example, in an asset sale could your assets be written down, causing you to pay more taxes in the future?
Furthermore, in a stock sale, does an Asset-Write-down create a DTA, like a Write-Up creates a DTL?
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Hi Prospect in IB-M&A, any of these topics helpful:
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I hope those threads give you a bit more insight.
Don't think this is right. The whole idea of an asset purchase is that tax basis doesn't change - no goodwill and therefore no bargain sale. If you think about the accounting, you can't possibly have a gain and still have the BS balance unless you mark the asset above the price you purchased it (which you don't do in an asset sale)
To the OP second question, yeah DTL and DTA both can arise in an equity sale. DTA arising if you have an asset write down, although this will almost never happen
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