BUYING AND SELLING- TAX CONSEQUENCES Speaker: Robert J. Sullivan

BUYING AND SELLING - TAX CONSEQUENCES Importance of type and status of seller; –C corp, S corp, LLC, partnership, proprietorship; –Available losses

BUYING AND SELLING - TAX CONSEQUENCES Importance of type of buyer; –Public company –Closely held company.

BUYING AND SELLING - TAX CONSEQUENCES Types of transactions: –Stock sale –Asset sale –Exchange of shares –Stock sale/asset sale election

BUYING AND SELLING - TAX CONSEQUENCES Observations: –Sellers– Generally want capital gains and/or deferral. –Buyers– Generally want either immediate and future tax write-offs, or Minimal negative impact on future earnings.

BUYING AND SELLING - TAX CONSEQUENCES Questions to be addressed by buyer: –Are tax attributes such as net operating losses available? –If so, can they be salvaged? –Is there concern about reducing future reported earnings? –Is future tax savings a major factor?

BUYING AND SELLING - TAX CONSEQUENCES Questions to be addressed by sellers: –Can/should tax be deferred? –Can deal be structured for pure capital gain? –Is risk in accepting deferred payment determinable? –Is risk in accepting deferred payment acceptable?