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Structuring a Transaction: Ways to Minimize Income Tax Implications for Sellers

Mar 12, 2019

This article originally appeared in the March 2019 TaxStringer and is reprinted with permission from the New York State Society of Certified Public Accountants.

Whether you’re buying or selling a business, you need to negotiate more than just price. How the deal is structured can have a significant impact on the amount of income taxes that will be paid by both parties.

Most taxable sale transactions are typically structured in one of three ways: asset sale, stock sale, or stock sale with a Sec. 338(h)(10) election. Each of these structures provides certain advantages to the buyer or seller. In this article, we’ll discuss the nuances of each structure and the importance of the allocation of the sales price.


Crystal Christenson, CPA, MST
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