Monthly Archives: July 2020

Stock Seller Takes Legal Action Against Buyers Over Failure to Close S Corp Books for Q1 Tax Loss

Explore a case study where a stock seller filed a lawsuit against buyers due to a breach of stock purchase agreement. Learn about the significance of Section 1377 election and clear communication in M&A transactions. July 27, 2020 Introduction: When

Posted in further assurance provision, S corporation, Section 1377 election Tagged with: , , , , , , ,

How a Chosen Merger Structure Led to a $2 Million Tax Impact for the Seller

Explore a case study where a business owner’s merger decision resulted in a substantial tax impact of over $2 million. Learn how the chosen deal structure influenced tax outcomes and the implications for buyers and sellers. Seek expert tax advice

Posted in boot, cash, form over substance, merger, substance over form, tax deferred reorganization Tagged with: , , , , , , , , , , , , , ,

Buyer’s Right to Sue Sellers for $9 Million in Pre and Post-Sales Tax Liabilities in M&A Deal

Explore a case study where a buyer’s right to sue sellers for $9 million in pre and post-sales tax liabilities was examined in an M&A deal. Learn about the legal arguments, court decisions, and the implications for similar situations. July

Posted in fraud carveout, post-closing sales tax, pre-closing sales tax, sales tax risk Tagged with: , , , , , , , , , , ,

Typo Leads to Legal Dispute: Stock Seller Sues Buyer for Tax Refund for Target’s Pre-Closing Operations

Explore a legal case where a simple typo in an acquisition agreement led to a complex dispute. Learn about the conflict, the legal arguments, and the court’s decision in Heritage Handoff Holdings, LLC v. Fontanella. July 10, 2020 Introduction: Acquisition

Posted in allocation of preclosing taxes refunds and credits, stock purchase agreement, typo or scriverner's error Tagged with: , , , , , , , , , , , , ,

Buyer Refunded $3.5M Due to Unemployment Tax Issue in M&A Deal

Learn about a legal case where a buyer was refunded $3.5 million due to an unemployment tax issue that arose after an M&A deal. Understand the importance of considering unemployment compensation tax when acquiring a business with employee turnover. July

Posted in seller's unemployment experience rating, successor liability Tagged with: , , , , , , , , , , ,

Selling Company’s $309 Million Stock Profit Might Avoid California Franchise Tax as Nonbusiness Income

Explore the tax implications of a $309 million stock sale and California Franchise Tax. Gain insights into the Fidelity National Info. Services, Inc. v. Franchise Tax Board case and how it impacts cross-state stock sales. July 8, 2020 Introduction: When

Posted in nonbusiness income/sale of subsidiary, state franchise/income tax, unitary business Tagged with: , , , , , , , , , , ,

Managing Sales Tax Risks When Buyer Operates Retail Liquor Business Before Closing in M&A Deals

Learn about the legal complexities and risks associated with sales tax in M&A transactions involving retail liquor businesses. Understand the importance of proper tax reporting during transitional arrangements. July 8, 2020 Introduction: When selling a business that involves a liquor

Posted in pre-closing management agreement, seller owner responsibility for underreported sales tax Tagged with: , , , , , , , , , ,

$2.8 Million Tax Consequences Arising from Incorrect Subsidiary Sale Structure

July 6, 2020 Explore a case study highlighting the significant tax implications resulting from an incorrect subsidiary sale structure in a business acquisition. Learn from the legal dispute and its aftermath, emphasizing the importance of accurate acquisition documents and coordination

Posted in mutual mistake, structure of transaction, Taxation Tagged with: , , , , , , , , , , , , , , , ,

Ensuring Payment of Foreign Taxes in M&A Escrow: Lessons from a Legal Case

Explore a legal case that highlights the importance of addressing foreign tax liabilities in M&A deals. Learn from an $80 million acquisition where inadequate management of escrow arrangements led to a dispute over unpaid Mexican income taxes. Wednesday, July 1,

Posted in escrow, foreign income tax Tagged with: , , , , , , , , , , , , , , , , ,

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