July 27, 2020 Introduction One tax issue when selling the stock of your S corporation business midyear is dividing up the year’s income and expenses. That is because an S corporation passes its income, and expenses through to the owners…
Blog Archives
Stock Seller Sues Buyers for Failure to Close S Corp Books to Obtain Q1 Taxable Loss
Posted in further assurance provision, S corporation, Section 1377 election Tagged with: M&A stories, M&A tips
Chosen Merger Structure Accelerates over $2 million in Taxes for Seller
July 21, 2020 Introduction Selling a business usually generates significant tax consequences. However, a transaction can sometimes be structured to defer the payment of taxes. The deal The business owner held the KFC and Pizza Hut franchises in Russia through…
Posted in boot, cash, form over substance, merger, substance over form, tax deferred reorganization Tagged with: M&A stories, M&A tips
Buyer of Target Can Sue Sellers for $9 Million of Pre and Post Sales Tax Liabilities
July 15, 2020 Introduction It can be challenging for a national footprint business to navigate the 11,000 sales tax jurisdictions in the United States. Thus, buying a large business presents state and local sales tax risk. The deal This deal…
Posted in fraud carveout, post-closing sales tax, pre-closing sales tax, sales tax risk Tagged with: M&A stories, M&A tips
Typo Forces Stock Seller of Business to Sue Buyer for Pre-Closing Tax Refund
July 10, 2020 Introduction There are lots of words in acquisition documents. A stock purchase agreement in a relatively simple transaction may contain 20,000 words. And there are many different references throughout the agreement to buyer and seller; and sometimes…
Posted in allocation of preclosing taxes refunds and credits, stock purchase agreement, typo or scriverner's error Tagged with: M&A stories, M&A tips
$3.5 Million Buyer Refund – No Transfer of Seller Unemployment Comp Experience
July 10, 2020 Introduction One tax expense to project when buying the assets of a business is unemployment compensation tax. Especially if the buyer is going to hire the seller’s employees. A potential risk for the buyer is inheriting a…
Posted in seller's unemployment experience rating, successor liability Tagged with: M&A stories, M&A tips
Seller $309 Million Stock Gain May Be Nonbusiness Income and Escape CA Franchise Tax
July 8, 2020 Introduction One tax risk of a multistate corporate business selling the stock of a subsidiary is exposing the gain to many states with different rules and tax rates. The deal The seller here provides credit and debit…
Posted in nonbusiness income/sale of subsidiary, state franchise/income tax, unitary business Tagged with: M&A stories, M&A tips
Seller Owner Must Pay Sales Tax on Underreported Buyer Liquor Sales Made Before Closing
July 8, 2020 Introduction Selling a business with a liquor license takes time. The buyer cannot acquire the license or permit without state approval. The buyer and seller sometime agree to a transitional arrangement where the buyer takes over the…
Posted in pre-closing management agreement, seller owner responsibility for underreported sales tax Tagged with: M&A stories, M&A tips
$2.8 Million Tax Cost for Failure to Follow Planned Structure of Subsidiary Sale
July 6, 2020 Introduction The formalities of a sale of a business can have significant tax consequences to the owners. It is important that the preferred structure of the sale is implemented. And that means that the seller and the…
M&A Escrow Did Not Adequately Secure Risk of Seller Nonpayment of Foreign Taxes
Wednesday, July 1, 2020 Introduction A buyer of the assets of a business does not want responsibility for the income taxes that apply to seller’s gain from the transaction. So how can the buyer manage the risk of the taxing…
Business Asset Buyer May Face $100 Million Payroll Tax Successor Liability Claim
June 30, 2020 Introduction One M&A tax risk in an asset acquisition is seller’s unpaid payroll taxes. The deal The buyer in this case purchased the assets of a financially distressed business for approximately $7.3 million dollars payable at closing…
Recent Posts
- Stock Seller Sues Buyers for Failure to Close S Corp Books to Obtain Q1 Taxable Loss
- Chosen Merger Structure Accelerates over $2 million in Taxes for Seller
- Buyer of Target Can Sue Sellers for $9 Million of Pre and Post Sales Tax Liabilities
- Typo Forces Stock Seller of Business to Sue Buyer for Pre-Closing Tax Refund
- $3.5 Million Buyer Refund – No Transfer of Seller Unemployment Comp Experience
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- further assurance provision
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- hiring seller's employees
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- New York
- no kickback or bribe rep
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- No Undisclosed Liabilities
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- nonbinding
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- noncompete area
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- note payment amount adjustment
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- offset or setoff provision
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- oral contract
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- post asset purchase issues
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- projections
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- purchase agreement
- purchase price
- purchase price adjustment
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- quality of earnings assessment
- ratifying unassumed contract by post-closing action
- reasonably equivalent value
- receipt of buyer equity or security
- receipt of buyer equity or security
- recoupment doctrine
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- reformation of contract
- reliance
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- securing buyer's note
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- seller owners equity interest in buyer
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- seller rep of no federal employer liability
- seller's age discrimination claims
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- seller's warranty claims
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- Taxation
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