The Installment Method in M&A

Deferred payment sales are typically subject to the installment method unless the taxpayer affirmatively elects out.  There are three traps that one can fall into with the installment method. 1. With certain types of sellers like S corporations, a tax free distribution can be made to the extent of basis in the pre-transaction planning stage. …

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M&A involving Foreign Corporations

Being on the west coast, much of my work has an international component. Foreign and international tax transactions can be particularly complex. There are many “gotchas” that make these transactions difficult to manage. Non-tax lawyers often deal with foreign tax-sensitive transactions but sometimes the client would be much better served if a tax lawyer is…

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Tax Aspects of Mergers and Acquistions: Types of Acquisitions

In our last post, I described some general issues relating to tax free reorganizations. This posts decsribes the types of tax free mergers and reorganizations and the requirements for each, especially as I see them in my law practice in Silicon Valley, San Francisco, Los Angeles and Palo Alto Califoirnia. Type A-Statutory Merger.  Mergers require compliance…

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Tax Free Mergers and Reorganizations in California: Continuity of Interest

As noted in an earlier post, some types of acquisitions can be tax free or tax deferred to the sellers. In order to determine whether the tax-free reorganization provisions are available, the type of currency being given to the sellers in exchange for their stock or assets must meet certain requirements. The “currency” could be in…

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