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

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

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, August 18, 2022 (in 2 days)

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

or call 1-800-926-7926
Course Materials

This CLE course will examine entity structuring alternatives when acquiring or selling a pass-through entity, emphasizing 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.

Description

Purchasers and sellers in M&A deals seeking to improve the 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 a rollover, determining best acquisition financing methods and considering self-employment constraints on rollover and incentive equity holders.

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. 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. A proper structuring determination requires analyzing the tax burdens on operating income, distributions, and exit transactions and reviewing 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.

READ MORE

Outline

  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

Benefits

The panel will review these and other key issues:

  • Advantages and disadvantages of using partnerships and S corporations as compared to C corporations
  • 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

Faculty

Falevich, Andrew
Andrew Falevich

Shareholder
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

Partner
Locke Lord

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

Attend on August 18

Cannot Attend August 18?

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

Download