Mergers and Acquisitions of Pass-Through Entities: Structuring to Minimize Taxes and Maximize Deal Value

M&A Pros and Cons of LLCs, Partnerships, S Corps, and C-Corp Conversions: Impact of Tax Reform

Note: CPE credit is not offered on this program

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

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Conducted on Wednesday, January 22, 2020

Recorded event now available

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Course Materials

This CLE course will examine entity structuring alternatives when acquiring or selling a pass-through entity, with particular emphasis on their differing impacts on sellers and purchasers (such as the impact on tax basis step-up, financing considerations, rollover and tax deferral issues, and incentive equity and self-employment matters). The panel will also discuss conversions of pass-through entities into C corporations, hybrid structures, and the treatment of asset vs. equity purchases in light of the 2017 tax reform.


Purchasers and sellers in M&A deals seeking to improve deal value and maximize income tax savings through flow-through structures need to consider various alternatives and impacts on both sellers and purchasers, such as maximizing tax basis step-up, allowing for tax deferral of rollover, determining best acquisition financing methods, considering self-employment constraints on rollover and incentive equity holders, unavailability of qualified small business stock exclusion and maximizing opportunities under the 2017 tax reform.

Pass-through entities (i.e., partnerships and S corporations) are still often preferred for M&A transactions due to, among other attributes, their single level of taxation, which has been lowered in light of the 2017 tax reform. Still, whether buying into a flow-through structure or trying to fit a target into a purchaser’s current flow-through structure, parties on both the buy-side and sell-side of a deal have to consider structuring to achieve various objectives of both the sellers and purchasers. Making a proper structuring determination requires analyzing the tax burdens on operating income, distributions and exit transactions, and a review of legal and practical business considerations.

In planning a transaction, the 2017 tax reform enabled full expensing of purchased assets, which may cause a purchaser to seek an acquisition that provides for a tax basis step-up in the assets. However, the chosen transaction structure may influence whether expensing is available.

Listen as our authoritative panel discusses the pros and cons of corporate and pass-through entity structures in M&A transactions. The panel will discuss how tax reform has impacted the analysis and when or if conversion of an LLC or a partnership to a C corp might be desirable.



  1. Choice of entity
    1. C corporations
    2. Pass-through entities (i.e., partnerships and S corporations)
    3. Hybrid structures
    4. Pros and cons
  2. Asset vs. entity sales
  3. Transaction structures and considerations
  4. Issues relating to financing and rollover
  5. Incentive equity and self-employment matters
  6. Corporate conversions: pros and cons


The panel will review these and other key issues:

  • Advantages and disadvantages of using partnerships and S corporations as compared to C corporations
  • Impact of 2017 tax reform on the use of C corporations, pass-through entities, and hybrids
  • Factors to consider in asset vs. entity sales
  • Various considerations with different types of transaction structures
  • Financing considerations to maximize tax benefits for buyers and sellers


Falevich, Andrew
Andrew Falevich

Vedder Price

Mr. Falevich focuses his practice on domestic and cross-border mergers and acquisitions, corporate and partnership...  |  Read More

Wynacht, Peter
Peter T. Wynacht

Vedder Price

Mr. Wynacht concentrates his practice in the area of federal tax law and has significant experience giving practical...  |  Read More

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