Consider the tax issues when buying or selling a business

Description

Abstract: Those who are buying or selling a closely held business need to consider a wide range of business, legal and financial issues. Although a sale’s terms should never be driven by tax considerations alone, taxes can have a significant impact. This article looks at a couple of important questions: If the business being sold is a corporation, should the parties structure the deal as a stock sale or an asset sale? And how should the purchase price be allocated among various assets? By understanding how taxes affect the economics of a deal, the parties can adjust the purchase price or terms accordingly.