M&A tax Tag

Deferred payment sales are typically subject to the installment method unless the taxpayer affirmatively elects out.  There are three traps that one can fall into with the installment method.1. With certain types of sellers like S corporations, a tax free distribution can be made to...

In our last post, I described some general issues relating to tax free reorganizations. This posts decsribes the types of tax free mergers and reorganizations and the requirements for each, especially as I see them in my law practice in Silicon Valley, San Francisco, Los Angeles...

In June 2012 the IRS issued REG-134042-07, containing proposed regulations that would clarify the basis of indebtedness of S corporations to their shareholders. The proposed regulations would allow some taxpayers to take greater deductions on the losses of debt-financed S corporations.Background:When a shareholder loans money...

Internal Revenue Code (I.R.C.) Section 7874 regulates corporate and partnership inversions. An “inversion” occurs when an entity elevates a subsidiary in a low-tax jurisdiction (e.g., Bermuda) to a parent position, inverting the previous affiliation and becoming a subsidiary of the foreign-headquartered entity. By relocating one’s...

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