Mergers and Acquisitions Tax

As a buyer, you’ll benefit from due diligence. It’s essential if you want to understand the stories behind the numbers, assess your target’s historical financial performance and condition, identify key drivers of trends, and recognize both weaknesses and future opportunities. It can also help important to identify and minimize federal tax exposures, especially for the successor tax liabilities of your target related to pre-closing period operations. Buy-side due diligence should also be conducted for state and local taxes on income, gross receipts, sales, use, franchise, property, payroll, and others.

Since an ownership change often limits the use of net operating losses and tax credits, it’s important that you understand the full tax picture before entering into a transaction. We can conduct a Section 382 analysis to determine the amount of net operating losses that will be available after a transaction. We can also calculate earnings and profits for your company to determine how determine how distributions after a transaction will be taxed.

If you’re planning on selling your business, it’s important to understand tax implications, quantify tax attributes, and identify red flags for a prospective buyer. Sell-side due diligence can result in a higher sales price, can reduce the time and complexity of buy-side due diligence, and speed up the sale process. Our sell-side tax due diligence team will help you determine your company’s tax exposure and suggest key steps to mitigate it. The team will save you time, address challenges, and maximize your sales price.

As you enter into a transaction, we can help you calculate your after-tax proceeds, quantify the after-tax cash flow differences between potential transaction structures, and compute the value of a step-up in tax basis received by the buyer. Then, to maximize the value of your transaction, we’ll determine which tax attributes are available. This includes planning for net operating losses, tax credit carryforwards, and the recovery of the tax basis of assets.

During the acquisition or sale of your business, a strategic tax position can directly impact your return on investment. We can help you consider strategies such as asset sale versus equity transactions, purchase price allocations, Section 1202 studies, earnout pricing structures, and proper rollover planning.

If you’re buying or selling a business, raising capital, expanding into new markets or industries, or restructuring your current organization, your business value can be maximized with proper tax structuring. Our specialists can help you implement tax planning ideas that will ensure your transaction is structured efficiently. In addition, we’ll help develop a comprehensive tax plan designed to optimize saving opportunities, enhance cash flow, and increase profitability for your organization.

When buying or selling a business, you’ll likely incur significant transaction banking, legal, accounting, and regulatory fees. You can maximize your tax benefits if these costs are properly planned for and analyzed. Our experts can help increase cash flow and return on your investment by finding ways to accelerate deductions and minimize your tax burden. To give you peace of mind with the tax treatment of transaction costs, we’ll help identify and manage risk.

Timely, accurate reporting of your transaction will reassure you that you have received every possible tax benefit. For a smooth transition post-close, you’ll need a prompt analysis of final closing information and an examination of the tax treatment of transaction-related costs and basis adjustments. And to achieve the desired tax treatment and transaction results, you’ll need to identify and implement the appropriate transaction-related tax elections. Our team of specialists will guide you through each of these tasks. We’ll work proactively with you and your accounting team to collect key data, identify tax planning opportunities, and accurately reflect that data and your transaction in your tax filings.