Tax Issues for Rollover Equity in M&A Transactions: Key Considerations for Buyers and Sellers

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

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Conducted on Thursday, September 8, 2022

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Course Materials

This CLE/CPE course will provide tax professionals with an in-depth analysis of key tax issues of equity rollover in mergers and acquisitions. The panel will discuss critical provisions and structuring considerations for equity rollovers in M&A transactions, tax-free mergers, holding company structures, use of LLCs, current market trends, stock rights, and tax considerations for buyers and sellers.

Description

Seller equity rollover transactions can be effective valuation mechanisms and minimize taxes in private equity mergers and acquisitions. Although these transactions can facilitate a smooth ownership transition, they require sophisticated knowledge of crucial tax provisions to avoid potential tax liability.

Rollovers are typically structured as an exchange by the seller of part of its equity for common or preferred stock, resulting in a reduction in the cash purchase. The rollover can be a tax-free transaction for the seller when properly structured. However, an equity transaction may limit the buyer's ability to step up the acquired company's assets tax basis. Counsel must understand the tax treatment in these deals to achieve the desired tax outcomes for the parties.

Listen as our authoritative panel discusses critical tax provisions and structuring considerations for equity rollovers in M&A transactions, tax-free mergers, holding company structures, use of LLCs, stock rights, and tax considerations for buyers and sellers.

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Outline

  1. Tax consequences of acquisition transactions
  2. Achieving stepped-up basis for purchaser
  3. Requirements for tax-free rollovers to sellers
  4. Structuring options and key considerations

Benefits

The panel will review these and other relevant issues:

  • What are the critical tax issues to understand and consider when using equity rollovers?
  • What are the available structuring options for equity rollover transactions?
  • How can you properly structure a tax-free rollover transaction for sellers?
  • How can you ensure a stepped-up basis for purchasers?
  • What are the differences and tax implications of LLC drop-down and asset drop-down transactions?
  • What are the critical challenges of rollovers involving Section 1202 qualified small business stock?

Faculty

Czarnecki, David
David M. Czarnecki
Member
Morse Barnes-Brown & Pendleton

With over 15 years of extensive transactional experience, Mr. Czarnecki is exceptionally proficient in guiding clients...  |  Read More

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Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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