US Income

Structuring Corporate Acquisitions - Tax Aspects (770 - 3rd)

 

Portfolio Description

Tax Management Portfolio, Structuring Corporate Acquisitions -- Tax Aspects, No. 770-3rd, discusses the principal tax planning considerations related to designing an appropriate transactional structure for a corporate acquisition. It introduces the basic concepts of taxable transactions and tax-free reorganizations, as well as stock and asset acquisition structures; the consequences to various parties of each transactional form are discussed, with particular emphasis on the factors which point to the use of a particular acquisition structure. In addition, more complex acquisition structures are explained, as well as the critical aspects of financing techniques (including the tax consequences of various financial instruments which may be used to finance acquisitions), several special applications of §351 in the context of corporate acquisitions, matters relating to the preservation and usability of loss carryovers and other tax attributes, issues arising when a corporation is acquired out of an affiliated group, tax treatment of transaction costs, acquisition-related compensation issues, techniques for disposing of unwanted assets, allocation of tax risks between a buyer and seller of a corporate business, and selected non-tax issues.

This Portfolio generally does not discuss (i) the use of partnerships, S corporations, and other entities which are subject to special taxing regimes, (ii) special considerations where a party to an acquisition is foreign, or (iii) special considerations relating to financially troubled businesses (including bankruptcy situations).

Many of the topics discussed herein are considered in greater detail in other Tax Management Portfolios. Of particular relevance are 780 T.M., Net Operating Losses and Other Tax Attributes -- Sections 381, 382, 383, 384 and 269; 565 T.M., Installment Sales; 784 T.M., Corporate Liquidations; 765 T.M., Stock Rights and Stock Dividends -- Sections 305 and 306; 776 T.M., Corporate Separations ; 536 T.M., Interest Expense Deductions ; 535 T.M., Time Value of Money: OID and Imputed Interest; 767 T.M., Redemptions; 758 T.M., Transfers to Controlled Corporations: In General; 384 T.M., Restricted Property -- Section 83; 390 T.M., Reasonable Compensation; 772 T.M., Corporate Acquisitions -- D Reorganizations; and 771 T.M., Corporate Acquisitions -- (A), (B), and (C) Reorganizations.

This Portfolio may be cited as Phillips and Rothman, 770-3rd T.M., Structuring Corporate Acquisitions -- Tax Aspects.

Barnet Phillips, IV, Partner, Skadden, Arps, Slate, Meagher & Flom L.L.P., New York, New York; B.A., Yale University 1970; J.D., Fordham University 1973; LL.M., New York University 1977.

Robert P. Rothman, Of Counsel, Piper Rudnick L.L.P., New York, New York; B.S., Cornell University 1978; J.D., Columbia University 1981; Formerly associated with Skadden, Arps, Slate, Meagher & Flom L.L.P., New York, New York.