S Corps Present Challenges, Opportunities in M&A Transactions

When an S corp is involved in a merger, acquisition or business sale-on either side of the transaction-careful attention must be paid to the tax issues specific to S corps as well as timing issues and how the transaction will affect the tax positions of the S corp shareholders. And when the transaction also involves a C corp, a thorough understanding of how tax code affects both types of entities is a must, according to Joseph B. Darby III, the author of CCH’s brand-new Practical Guide to Mergers, Acquisitions and Business Sales. In chapter 8 of this book, Darby covers the specifics of transactions involving S corps with detailed examples, calculations and analysis that puts it all together in one place.

Covered topics include:

  • Corporate level tax liabilities under Code Sections 1374 and 1375
  • Gains and losses and how they are applied
  • The “sting” tax and how it works
  • Qualified Subchapter S Subsidiaries
  • Code Sec. 338(h)(10) elections.

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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.

Read this article from CCH’s Journal of Taxation of Financial Products.


Wolters Kluwer Tax and Accounting

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