Acquisitions (from the buyer's
perspective)
1 Tax treatment of different acquisitions
What are the differences in tax treatment between an acquisition
of stock in a company and the acquisition of business assets and
liabilities?
From the buyer's perspective, assuming the buyer is a
corporate taxpayer, there is no difference whether it acquires
shares in a company or business assets and liabilities. In both
instances, the buyer takes a cost basis in the shares or the assets
and liabilities so acquired.
2 Step-up in basis
In what circumstances does a purchaser get a step-up in basis in
the business assets of the target company? Can goodwill and other
intangibles be depreciated for tax purposes in the event of the
purchase of those assets, and the purchase of stock in a company
owning those assets?
