Fundraising & Equity
M&A Tax: Asset Sale vs Stock Sale and Why It Matters to Your Exit
Collated by Aparna Devalla, CPA
Curated by Rubric Financial
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Why Structure Matters
- The same $50M acquisition can leave the founders with materially different after-tax proceeds depending on structure.
- Buyers usually prefer asset sales (they get to step up basis on the assets, allowing them to depreciate going forward and write off acquired IP).
- Sellers usually prefer stock sales (cleaner tax: shareholders sell shares for capital gains, no double-tax through the corporation, QSBS eligibility preserved).
- Reverse triangular merger: a common structure that's technically a stock sale for tax purposes but provides buyer with the operational benefits of an asset acquisition.
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