M&A and Tax Reform: New Deal Structure Considerations

Capital Expensing, Transition Tax, Business Interest Deduction, NOL Carryforwards, Executive Compensation and More

Note: CPE credit is not offered on this program

A live 90-minute premium CLE webinar with interactive Q&A


Thursday, April 18, 2019

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

(Alert: Event date has changed from 3/19/2019!)

Early Registration Discount Deadline, Friday, March 22, 2019

or call 1-800-926-7926

This CLE webinar will examine provisions of the new tax reform law that could have a significant impact on the structuring of mergers and acquisitions. The panel will discuss the steps counsel should take now with M&A deals in process and upfront issues to consider in transactions going forward.

Description

Tax reform is already impacting mergers and acquisitions in several important respects. M&A counsel must be able to structure M&A deals to address the new tax provisions.

Taxpayers are no longer able to carry back net operating losses (NOL); application of certain NOL carryforwards against net operating income will also be limited. The business interest expense deduction is now limited to only 30 percent of adjusted taxable income of a taxpayer, and the new regulations provide a number of new restrictions on these deductions. Buyers and sellers should model pricing to reflect the impact of these new limitations on their M&A transactions.

The tax law imposed a one-time transition tax which may result in a tax liability for a U.S. company that is a target in an M&A transaction and owns foreign subsidiaries or other foreign investments. That provision took effect in 2018, but buyers will be performing diligence on these computations for years to come, in addition to monitoring any deferred transition taxes.

The law also allows taxpayers to immediately expense 100 percent of the cost of certain property acquired and placed in service through 2022. This provision could incentivize a buyer to press for an asset sale structure as opposed to a stock sale structure. Changes in the corporate tax rate will also impact the value of the "tax shield" in an acquisition.` New Section 199A provides a deduction for passthrough businesses that permanently reduces their taxes, and this deduction impacts M&A activity.

Listen as our authoritative panel analyzes these and other provisions of the tax law that will impact M&A transactions. The panel will discuss the new rules on NOL carryforwards, transition tax, capital expenses, the sale of partnership interests, business interest expenses, and more.

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Outline

  1. Tax reform: Background and timeline for implementation
  2. Limitations on use of net operating losses
  3. Transition tax on deferred foreign income
  4. Immediate capital expensing
  5. Limitations on business interest expense deductions

Benefits

The panel will review these and other key issues:

  • How has tax reform changed the analysis of a stock sale vs. asset sale structure?
  • What is the significance of the new limitations on the deductibility of NOLs and business interest expenses?
  • What is the one-time transition tax and how might it affect deal structure?

Faculty

Daniel, Russell
Russell A. Daniel

Partner
Grant Thornton

Mr. Daniel leads Grant Thornton’s Southeast Region Mergers & Acquisitions Tax Services practice. He assists...  |  Read More

Strong2, David
David Strong

Partner
Morrison & Foerster

Mr. Strong is co-chair of the Federal Tax Practice Group and the Tax Department at his firm and is also the managing...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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48 hours after event

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