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Perspectives

M&A Tax Talk

Insights on trends and recurring matters regarding tax topics in M&A transactions

M&A often revolves around two organizations charting either a new path together or one that splits apart. Sometimes taking a wider view can be helpful. Our M&A Tax Talk series may help you see the bigger picture for your organization, providing you with insights to move forward with confidence throughout the M&A lifecycle: strategy, readiness, execution, closing, and post-close. Tax Talk focuses on the hot topics related to your M&A strategy. The series offers insights that may prepare you to move during the deal, achieve your vision, and provide the value you seek.

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Representation and warranty insurance

November 20, 2019

The robust and competitive M&A market has led to an increase in representation and warranty insurance (RWI) policies, which has transformed the M&A process. This month we outline some of the key tax-related issues that RWI addresses, including its ability to protect a buyer against a seller’s breach of representation, and warranties included in an acquisition agreement. In addition, we’ll look at how RWI can help both buyers and sellers speed up – or even eliminate–the escrow process.

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Proposed regulations would significantly impact the value of tax attributes following an ownership change

October 22, 2019

This month, we examine the proposed rule changes that could significantly limit a corporation’s ability to utilize net operating losses (NOLs) and other tax attributes following an ownership change.

Specifically, we’ll examine how these proposed changes could impact an organization’s tax burden and identify some potential actions NOL companies—and buyers of such companies—should consider to ameliorate the negative effects that companies could face following an ownership change.

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Divestiture-related tax considerations

September 2019

If you’ve ever sold a home, you know that preparation is key to achieving the best price. You make minor repairs, upgrade outdated appliances, put on a fresh coat of paint, and stage the home to make it attractive to potential buyers.

In many ways, selling a business is similar, except that your preparation is different. Specifically, it is critical to develop an understanding of the tax work that should be addressed in advance of starting negotiations.

Post-tax reform contracting considerations

July 2019

With the passage of the Tax Cuts and Jobs Acts of 2017 (TCJA), US taxpayers engaging in acquisitions and dispositions should evaluate additional contracting considerations for proposed transactions.

This is evident when drafting language in letters of intent (LOI) or purchase agreements regarding tax matters including the benefits of immediate expensing of acquired property, inheritance of transition tax liabilities, and how to treat net operating losses (NOLs) in the pre-closing period.

Check back each month as new editions of M&A Tax Talk are published or subscribe below to receive them straight to your inbox.

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