By employing a cost segregation study, a significant portion of a property may be reclassified to a shorter life category.
In general, the impact of a Sec. 338 election is that a stock acquisition is treated as an asset acquisition.
When a company embarks on an international restructuring, it is extremely important to consider the impact of Section 367.
Obtaining a valuation from an independent valuation provider is essential to proving that the security has no liquidating value.
When valuation is important for tax purposes, breakdown by legal entity is key since each has its own tax identity and related tax consequences.
In the case of a U.S. acquisition of a foreign target, it was oftentimes beneficial to make a Section 338(g) election.
Canada, like the U.S., imposes a thorough set of documentation requirements, and imposes penalties for failure to comply.
A key tax consideration is whether the acquirer will be entitled to a stepped up tax basis in the assets and thus entitled to future tax deductions.
Determining the degree of insolvency is a key step since this will dictate the amount of COD income which may be excluded.