Stepped Up Tax Basis on the Share Purchase of a C-Corp

Member resources:

Frequent asked questions:

What is Searchfunder.com?

Searchfunder.com is an online community of searchers, investors, lenders, brokers and other professionals. Over 80% of those involved in searchfunds maintain a Searchfunder account to help them network, hire, and mentor others.

What are the benefits of membership?

In addition to accessing the most active online network of business buyers, Searchfunder licenses research that is simply not cost effective for individuals. Access over 15,000 industry reports and 50,000 transaction financials. You also get monthly credits for contact information for your company sourcing campaign with the option to purchase more at drastically discounted rates. Searchfunder has pre-purchased access from these data providers in order to empower individual buyers and to help searchers level the playing field versus private equity.

Do you have deals?

While we are primarily a buy-side network, we do have hundreds of brokers that regularly post deals to the community.

Can I find an internship on Searchfunder?

Absolutely! We have the industry's largest intern job board. If you are considering a search, the first step is to help another business buyer so you can hit the ground running.

What does it cost?

Searchfunder is a subscription service. We offer flexible monthly, annual and lifetime memberships.

Monthly

$79 / month

Annual

$19 / month

Lifetime

$432 / once

Those who maintain an account with us for over 4 continuous years are permanently added to the community without the need for a membership.

Do I need an MBA to join?

While a large number of our members come from dedicated programs at Harvard Business School, Stanford GSB, Chicago Booth, and other top programs, searching is no longer reserved for the elite. With the current abundance of dry powder in private equity, and an increasing number of business owners reaching retirement age, good deals rarely go unfunded.

Post a question, deal, job, etc...

Make a post...

Complete registration to post.

by a searcher from Carnegie Mellon University - Tepper School of Business
in Jersey City, NJ, USA

1yr ago

Stepped Up Tax Basis on the Share Purchase of a C-Corp

I'm looking to structure a share purchase deal (need to keep contracts and licenses) and would like to step up the tax basis to get the advantages of an asset sale. The target is a c-corp.

I'm trying to wrap my head around the various Section 338 elections. My understanding is that the 338(h)(10) election can be used for S-corps. Are there other elections that are specific to the purchase of a c-corp? How does the F-reorg fit into this?

0 Likes

344 Views

reply by an intermediary 1yr ago
from The Johns Hopkins University in Gainesville, FL, USA

Robert has touched on the key aspects here: the financial ramifications of each course of action need to be modeled and the net present value of the options compared. Ideally the model should cover from acquisition to planned divestiture, though discounting reduces the impact of a future sale significantly if the holding period is more than 10 years.

reply by a professional 1yr ago
from New York University in New York, NY, USA

You want a 338(h)(10) or 336(e), but it depends on the specifics of the acquisition. Anything you can do with a S Corp you can do with a C Corp, but the tax consequences are a bit different (two levels of tax).