Asset Sale vs. Stock Sale: Tax Considerations, Advanced Drafting and Structuring Techniques for Tax Counsel

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Tuesday, June 27, 2017
Recorded event now available


This webinar will provide practical guidance into the best practices for tax counsel advising clients buying or selling a business on the tax ramifications of structuring the transaction as an asset sale vs. a stock sale. Each structure has distinct advantages and disadvantages, and tax counsel must be able to advise clients as to which structure makes the most sense for the client’s particular circumstance, and then to draft the appropriate purchase and sale documents to reflect the client’s intent. The panel will go beyond the basics to offer useful tools in structuring a business sale transaction with optimal tax results.

Description

The purchase or sale of a business is often a long, drawn-out process, complicated by the different priorities of the buyer and seller. While as a general rule sellers tend to prefer a stock sale while buyers prefer an asset sale, there are circumstances where these general guidelines do not apply.

Tax counsel advising buyers or sellers must understand the tax ramifications of any planned transaction at the outset to structure the deal in the most tax-efficient way possible.

Factors such as the type of entity being sold and whether the target company is part of an affiliated group filing a consolidated tax return will impact the types of provisions necessary in the agreement. Also, certain elections may be available or advisable in the context of a stock sale, and complex analyses regarding purchase price allocation or transfer tax determinations might be necessary in the context of an asset sale.

Listen as our experienced panel provides a deep exploration into the negotiating and essential drafting techniques of the purchase and sale of a business from the perspective of both buyer and seller.

Outline

  1. Seller’s considerations in negotiating the transaction
  2. Buyer’s considerations in negotiating the transaction
  3. Impact of the target company’s characteristics
  4. Impact of elections under IRC § 338, § 336(e) and Treas. Reg. 1.1502-36(d)
  5. International tax and state/local tax considerations
  6. Contractual protections

Benefits

The panel will discuss these and other critical issues:

  • What impact does entity type have on the buyer’s and seller’s perspective in a sale?
  • What are the circumstances in which an asset sale would benefit a seller?
  • Under what circumstances would a stock sale benefit a purchaser?
  • How to structure a 338(h)(10) compliant document
  • How to properly negotiate and draft tax indemnification provisions in a sale agreement
  • Best practices for negotiating and drafting purchase price allocation in the sale agreement

Learning Objectives

After completing this course, you will be able to:

  • Determine advantages and disadvantages of selling or purchasing a business as either an asset sale or a stock sale
  • Identify tax indemnification provisions relevant to the transaction structure
  • Distinguish between the interests of buyers and sellers in making purchase price allocation
  • Recognize key characteristics of a target company

Faculty

Matthew J. Donnelly, Esq.
Skadden Arps Slate Meagher & Flom, Washington, D.C.

Mr. Donnelly advises public and private companies on a broad range of domestic and international U.S. federal income tax issues, with particular focus on mergers, acquisitions, dispositions, joint ventures, debt and equity offerings, bankruptcy restructurings, transfer pricing, real estate investment trusts and tax-equity financings. He has significant experience with tax issues associated with related-party transactions.

Paul Schockett, Counsel
Skadden Arps Slate Meagher & Flom, Washington, D.C.

Mr. Schockett advises public and private companies on a broad range of U.S. federal income tax matters, with particular focus on U.S. and cross-border transactions. His practice includes significant work involving the tax aspects of partnership acquisitions and dispositions, joint venture and investment fund formations, and corporate mergers and acquisitions. He also advises clients with regard to the taxation of debt and equity financings, initial public offerings, bankruptcy restructurings and internal reorganizations. He frequently writes and lectures on tax-related topics, including partnership taxation, M&A transaction structuring, tax aspects of troubled company workouts, and renewable energy tax benefits.


EA Credit

Enrolled Agent credit processing is available for an additional fee per person.

EA Processing $5.00


Recordings

CLE On-Demand - Streaming Video

Note: Self-study CPE and EA credits are not offered on this On-Demand webinar.

Includes recorded streaming video of full program plus PDF handouts.

On-demand is the only recorded format recognized for CLE credits in DE, IN, KS, LA, MS, NC, OH, OK, SC, TN, VA, WI.

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*Only available for attorneys admitted for more than two years. For OH CLE credits, only programs recorded within the current calendar year are eligible - contact the CLE department for verification.

**NH attendees must self-determine if a program is eligible for credit and self-report their attendance.

CLE On-Demand Video $297.00

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Recorded Event

Includes full event recording plus handouts.

Note: Self-study CPE and EA credits are not offered on recorded events.

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AK, AZ, CA, CO, CT, FL, GA, HI, IA, ID, IL, KY, ME, MN, MO, MT, ND, NJ, NM, NY, OR, PA, TN, TX, UT, VT, WA, WV, WY (Note: Some states restrict CLE eligibility based on the age of a program. Refer to our state CLE Map for additional information.)

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Recorded Webinar Download $297.00

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Recorded Audio Download (MP3) $297.00

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Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Program Materials

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Program Materials

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CLE Credits

Many states grant CLE credits for on-demand streaming audio programs and recorded events. Our programs are pre-approved in many states. Refer to our state CLE map for state-specific information.

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CPE Credit

Strafford is a NASBA CPE sponsor and our live webinars qualify for CPE credits. They offer you a high quality, cost effective, and convenient CPE option, with no lost travel time or expenses.

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Customer Reviews

I like that the webinar was easy to access and offered good presenters and written materials.

Kathryn Spillers

Greenberg Glusker

I liked that the speakers' explanations of the materials were easy to follow.

Ross Cohen

Greenebaum, Doll & McDonald

The teleconference addressed a highly relevant topic that recurs in my practice. The subject matter was very timely and informative.

Saleem Moghal

Paul Hastings Janofsky & Walker

It was a very good presentation of complex material, managed in an understandable format. The information will be useful in my practice.

Jay H. McDowell

Withers Bergman

The presenters were knowledgeable and able to intelligently answer questions.

Tommy Orr

Mikunda, Cottrell & Co.

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Tax Law Advisory Board

Robert S. Barnett

Partner

Capell Barnett Matalon & Schoenfeld

William H. Byrnes

Associate Dean, Special Projects

Texas A&M University Law

Robert A.N. Cudd

Senior Partner

Polsinelli

Patrick Derdenger

Tax Partner

Steptoe & Johnson

Janice Eiseman

Principal

Cummings & Lockwood

Lynn Fowler

Partner

Kilpatrick Townsend & Stockton

Edward Froelich

Of Counsel

Morrison & Foerster

Daniel L. Gottfried

Partner

Hinckley Allen

J. Leigh Griffith

Partner and Practice Group Leader - Tax

Waller Lansden Dortch & Davis

L. Andrew Immerman

Partner

Alston & Bird

Mark S. Lange

Partner

BakerHostetler

Joseph C. Mandarino

Partner

Smith Gambrell & Russell

Lori Mathison

Partner, Cross-Border Transactions Tax

Fraser Milner Casgrain

Christian M. McBurney

Partner

Arent Fox

Suzanne Ross McDowell

Partner, Tax-Exempt Organizations

Steptoe & Johnson

Todd Reinstein

Partner, Corporate Tax and Due Diligence

Pepper Hamilton

Alex Sadler

Partner

Morgan Lewis

Susan Seabrook

Shareholder

Buchanan Ingersoll & Rooney

Peter Stathopoulos

Managing Director, State and Local Tax Practice

Bennett Thrasher

Eric Tresh

Partner & Co-Chair, State & Local Tax Practice

Sutherland Asbill & Brennan

Amanda Wilson

Shareholder

Lowndes Drosdick Doster Kantor & Reed

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