Tax-Free Transaction
Hi All,
I am trying to structure a potential transaction tax-free and have been having some difficulties. Basically, the background is that there is a JV between two Companies, one of the Companies owns a controlling stake, whereas the other Company owns approx 30%. I am trying to come up with a solution of how the Controlling Company can acquire the 30% stake from its partner, without triggering a tax gain to the partner, or atleast, minimizing any taxes as much as possible. Anyone have any ideas? I do not believe a reverse morris trust structure would work since the seller does not own more than 50%....Hope someone can help?Thank you.
Yes
IRC: 368 http://www.law.cornell.edu/uscode/text/26/368
Type "A" Reorganization (stock-for-assets acquisition) -statutory mergers/consolidation -forward triangular mergers -reverse triangular mergers Type "B" Reorganization (stock-for-stock acquisition) Type "C" Reorganization (stock-for-assets acquisition)
IRC: 351 http://www.law.cornell.edu/uscode/text/26/351
351 Mergers
Good luck.
Thanks, I have looked into these and they do not apply for specific reasons.
Really? And these specific reasons are what?
Tax Free Reorgs and Asset Write Ups (Originally Posted: 04/22/2013)
Can/Do you still write up assets in tax free reorganizations (which will impact goodwill creation). I know that there is a carryover basis for tax purposes, but does this feature of an A, B, or C reorganization prevent the Acquirer from writing up the Target's assets. Working on an accretion dilution model and had this thought come up -- basically am I confusing basis with book value of the assets?
bump.
Will give 3 SBs for detailed answer.
Really? I stumped WSO?
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