TITLE

There Goes Another Loophole

AUTHOR(S)
Hahn, Avital Louria
PUB. DATE
June 2003
SOURCE
Investment Dealers' Digest;6/16/2003, Vol. 69 Issue 24, p15
SOURCE TYPE
Trade Publication
DOC. TYPE
Article
ABSTRACT
A tried-and-true rule in the M&A market is that the last bit of value a money-losing firm has is the potential tax write-off it could provide an acquirer. But recent changes to the federal tax code have at last closed that loophole, leaving hundreds of potential acquirees in merger purgatory. Before the changes, acquirers would often deduct net operating losses of the acquired company from their own money-making operations-now it is much more difficult to do that. While other factors that drive deals-including acquirer cash reserves and exit strategies-could still play a role in creating new activity, for many small money-losing companies, the one reason for being acquired-tax write-offs-has been all but eliminated.
ACCESSION #
10170970

 

Related Articles

  • The IRS Reviews Revenues Procedure 81-70: The Stakes for Taxpayers Are High. Keppler, Juliane Laura // Tax Executive;Mar/Apr2003, Vol. 55 Issue 2, p122 

    Discusses the issues raised by the review made by the U.S. Internal Revenue Service of Revenue Procedure 81-70, a revenue procedure that addresses the methodology employed in determining tax basis of stocks acquired in certain types of tax-free corporate acquisitions. Elements that made the...

  • Profiting from losses. Heslin, Edward J. // Business Quarterly;Autumn90, Vol. 55 Issue 2, p51 

    Discusses ways of profiting from the tax losses of a business targeted for acquisition. Application of business losses against taxable income; Use of losses following acquisition of control; Possible increase of tax losses from deemed dispositions.

  • THE NEW INTERNAL REVENUE CODE SECTION 384: LIMITING THE USE OF PREACQUISITION LOSSES TO OFFSET BUILT-IN GAINS. Guenther, Sara // Journal of Corporation Law;Summer89, Vol. 14 Issue 4, p999 

    Discusses the limitations on the use of preacquisition losses to offset built-in gains implemented under Section 384 of the Internal Revenue Code (IRC) in the U.S. Background on the carry-over of corporate tax attributes; Reasons for the enactment of the IRC section 384; Provisions;...

  • Avoiding Tax Traps In a Target's Pay Plan. Partigan, John C. // Mergers & Acquisitions: The Dealermaker's Journal;Nov2005, Vol. 40 Issue 11, p42 

    The article focuses on the impact of the enactment of the section 409A of the U.S. Internal Revenue Code that aims to regulate deferred compensation plans in 2004 on the mergers and acquisitions sector. The section includes any deferral of compensation from the year in which the related services...

  • Mergers and Acquisitions. Avent Jr., Thomas W. // Corporate Business Taxation Monthly;Oct2004, Vol. 6 Issue 1, p19 

    The article comments on the relevance of Internal Revenue Service's (IRS) Revenue Ruling 2004-78. In this ruling, the IRS ruled that an exchange of debt instruments pursuant to Internal Revenue Code Sec. 368(a)(1)(A), reorganization is also an exchange of "securities" within the meaning of Code...

  • Mutual Banking Institutions in Tax-Free Reorganizations: What Kind of Stock Does a Nonstock Corporation Have? IMMERMAN, L. ANDREW; RIPLEY, HEATHER // Journal of Taxation & Regulation of Financial Institutions;Sep/Oct2012, Vol. 26 Issue 1, p29 

    The Internal Revenue Code's provisions for tax-free reorganizations generally presuppose that the corporate entities involved in these transactions issue stock. Judicially developed doctrines like the continuity of interest requirement further entrench this stock-centric perspective. But the...

  • Liquidations That Run for the Border. Mottahedeh, Rafi W. // M&A Tax Report;Dec2013, Vol. 22 Issue 5, p6 

    The article offers information on the tax-free liquidation of a subsidiary. A general rule in the U.S. Internal Revenue Code Section 367(a)(1) indicates that a foreign corporation is not treated as a corporation to the extent that gain is accredited for liquidations, mergers, and other...

  • Acquisitions, Dispositions & Structuring Techniques Corner. Dance, Glenn E.; Erickson, Jeff; Jones, Jessica M. // Journal of Passthrough Entities;Mar/Apr2013, Vol. 16 Issue 2, p7 

    The article discusses how identical partnership interests, that have same economic benefits, purchased in the same partnership and at the same time differ vastly in their tax attributes. Several sections of Internal Revenue Code including section 263A, 704(b) and 704(c) help explain these...

  • A Good Old Habit, or Just an Old One? Preferential Tax Treatment for Reorganizations. Brauner, Yariv // Brigham Young University Law Review;2004, Vol. 2004 Issue 1, p1 

    Proposes to repeal the reorganization rules under the U.S. Internal Revenue Code that grant preferential tax treatment to a significant number of merger and acquisition transactions. Feature that is common in all reorganization transactions and stated justification of the applicable tax rules;...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics