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.

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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