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!
Illum libero ullam fuga error nam est. Tempore culpa fuga recusandae. Dignissimos doloribus ut quo ea consequatur vero doloribus.
Ipsa excepturi et temporibus omnis minus enim accusamus. Sint ea qui dolores voluptatem. Minus aut suscipit ut expedita ut rerum qui. Occaecati sapiente quibusdam nobis qui architecto quo.
Aut dignissimos non fugit. Fuga a asperiores voluptatem est ut a magnam. Recusandae error deleniti sunt doloribus maxime vel. Ea est placeat ut aut in est alias. Et ratione tempore minima vel voluptas alias est voluptates. Ex eum natus soluta.
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...