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July 13, 2025

by a searcher from The Ohio State University - Max M. Fisher College of Business in Miami, FL, USA

We are under LOI to acquire a business with the real estate. We are bringing in a third party sale leaseback firm to take over the real estate and are using some of the extra proceeds to fund the business acquisition. Given the real estate basis is ~$2.5M and the SLB offer is ~$5.0M, would this create a $2.5M capital gains tax liability? Again, we are not “keeping” any of the cash but paying it directly to the seller for the business. This is a C-Corp and a stock deal. F-reorg may be tough to get seller on board with.
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Reply by a professional
from Harvard University in Lynbrook, NY 11563, USA
Simplest solution is to make it an asset deal for tax purposes and allocate 5M to the building so no gain on sale. If that's not doable, there are potentially other solutions, but you def need a tax advisor. Email at redacted if you want to set up a consult.
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Reply by an intermediary
from California State University, Northridge in Los Angeles, CA, USA
Seems like a CPA question but keep us in mind for future SLB opportunities. Sounds like you have a good deal. redacted
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