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.
The valuation of a development-stage company’s common stock is best estimated using the methods in the Practice Aid.