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Category: M&A – Taxes

  • Understanding IRC §409A: Deferred Compensation Rules Every Employer Should Know

    Deferred compensation plans are an important tool employers use to attract and retain talent. They allow employees to earn compensation today but receive it later — often at retirement, separation, or another milestone. But with this flexibility comes significant complexity, especially for nonqualified deferred compensation (NQDC) plans. Enter IRC §409A, enacted in 2004 after the…

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    The Skinny on 338 Elections

    When it comes to M&A, tax considerations can play a crucial role in negotiating deal terms. Among the various tax elections available, the §338 election is particularly relevant as it allows certain acquirers in a stock-sale to mark-up the basis of the assets purchased in exchange for increased cost recovery in future periods. This increased…

  • Purchase Price Allocation Differences between GAAP & Tax Reporting

    When a M&A transaction occurs, it typically triggers reporting requirements, such as purchase price allocations. Working in both Finance and Tax, you realize allocations can vary based on if they are reported to stakeholders (financial/GAAP reporting) or taxing authorities (tax reporting). In this post, we will discuss the purpose of, and key differences between, GAAP…

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    Exit Consideration for Partnerships and S Corporations

    Partnerships and S corporations are some of the most widely used tax entities. Although, they are both pass-through entities, these two business structures have significant tax differences. Below we highlight the annual compliance differences between Partnerships and S Corporations. In the next section, we will cover the differences to to consider upon investor exit. #…

  • TCJA & CARES Impact on NOL’s & M&A

    Prior to the Tax Cuts and Jobs Act (“TCJA”), net operating losses (“NOL’s”) generated allowed taxpayers to carryback the loss two years and/or carryforward up to 20 years. In addition to the carryback and carryforward provisions, taxpayers could fully offset taxable income if not limited by the IRC section 382 limitations. However, due to the…