Discussion:C-Corp. acquiring 100% C-Corp.
From TaxAlmanac
Discussion Forum Index --> Advanced Tax Questions --> C-Corp. acquiring 100% C-Corp.
Discussion Forum Index --> Tax Questions --> C-Corp. acquiring 100% C-Corp.
Rclausen@clausenaccounting.com (talk|edits) said: | 25 July 2008 |
| So, I am navigating the jungle of corporate M&A's, and need some thoughts from the community:
My client, let's call them A, acquired an out of state corp, let's call them B, in 2007. Since the acquisition they have operated as one coompany. Neither corporation has filed the 2007 tax returns. What would be the most beneficial: 1. Filing a consolidated return for the two corps. 2. File closing docs for B, and file one return for A solely. I am new to this part of corporate tax, and am having a hard time finding good information. Prior transactions that I have been involved in have been purchases of assets only, and hence we have not been involved in the closing of the other corp. ANY information is MUCH appreciated. -Robert | |
| 25 July 2008 | |
| There is a dearth of information here. Obviously they both need to file 2007 1120s since they were separate entities prior to merger. No consolidation for the first part of the year.
Questions to be answered include: 1. Was this a stock purchase or an asset purchase? 2. Is Corporation B still in existance and incorporated under the laws of its home state? 3. Have you read Sec. 368 and the corresponding Regs? 4. I presume that the corporation has a decent attorney. Have you talked with him/her? | |
RoyDaleOne (talk|edits) said: | 25 July 2008 |
| I have prepared a number of consolidated returns, over the years, and under the current regulations, I only see a few benefits from filing a consolidated return. So I suggest that a familiarization with consolidated regulations and rules couple with a command of the factual situation is needed to make an informed decision about such an election.
As Marcilio suggests, the casting of the transaction in any form of a merger, requires complete knowledge of the effects of such a transactional decision. | |
Rclausen@clausenaccounting.com (talk|edits) said: | 25 July 2008 |
| Thank you both! I will check with my client attorney...
Thank you Marcilio. It was a stock purchase. Had it been an asset purchase, then it would have been pretty straight forward. I have to check with the attorney whether the corp. remains (which I doubt); but at the same time, I don't think there were any papers filed to close the corp. You have pointed me in the right direction... | |
NOTICE to readers:
This discussion has been locked, as the long user name of the original poster will negatively affect the formatting of the tax forum columns on the front page, if any new reply is added. If you have a follow-up question or comment, please start a new discussion instead. Attempting to post using the "reply" box below will result in a generic error message. Thank you.
