NEW M&A TAX RULE EFFECTIVE MAY 15, 2013 FAVORS INDIVIDUALS

H. Adam Shapiro

Yesterday, on May 15, 2013, a new regulation went into effect under 336(e) of the Internal Revenue Code that was designed to minimize an individual’s tax burden in a M&A transaction. Essentially, the Internal Revenue Service has provided a new option for parties to treat the transaction as either a sale of assets or a sale of stock, but only if the sale of stock is being sold to an unrelated third party or distributed to shareholders in a taxable transaction. This election is not available if the purchaser is a corporation.

As with any sale of stock (or assets), proper planning is important to make sure that all available tax saving strategies are employed. Danziger Shapiro understands how to properly structure a deal to save you money. To discuss this in greater detail or any other transactional and tax related legal issues; please feel free to contact us at Danziger Shapiro, P.C.

This entry is presented for informational purposes only and is not intended to constitute legal advice.

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