Achieving Step-up in Basis of Assets in Taxable Stock Purchases of S-Corporations
Created on December 08, 2020
Target companies in private equity and other acquisitions are often S-corporations. When these deals are structured as stock sales, buyers frequently want to achieve step-up in the basis of the target company's assets. This course, presented by Julie Rhoades of Dickinson Wright's tax practice, will discuss various strategies for achieving this basis step-up. Specifically, this course will review the availability of 338(h)(10) and 336(e) elections as well as the "drop-down LLC" structure, offer practical insight into how to choose among these strategies, and discuss the impact that these strategies could have on the business deal and purchase agreement terms.
- Identify the availability of various strategies for achieving asset basis step-up in taxable S corp acquisitions
- Weigh the pros and cons of available strategies based on the deal structure
- Draft appropriate reps and warranties to mitigate risk
- Assess how the use of strategies to achieve basis step-up may impact deal terms
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