#mergers-and-acquisitions
Mergers and Acquisitions
Accounting guidance for business acquisitions, goodwill, purchase price allocation, and deal structuring
Section 163(j) Interest Expense Limitation: 30% ATI, the Small Business Exemption, and the Real Property Trade Election
Section 163(j) caps the business interest deduction at 30% of adjusted taxable income, and OBBBA restored the EBITDA-style add-back for tax years beginning after December 31, 2024. This guide walks through the calculation, the small business exemption under Section 448(c), the irrevocable real property trade or business election, the partnership EBIE basis trap, and the Form 8990 reporting choreography.
Section 338(h)(10) Election: How Buyers and Sellers Turn a Stock Deal Into an Asset Deal
A practical guide to the federal tax election that lets buyers and sellers of S corporations and consolidated-group subsidiaries treat a stock purchase as an asset purchase for tax purposes — covering Form 8023, the seller gross-up, purchase price allocation under Section 1060, and the mistakes that commonly kill the election.
Section 367 Outbound Transfer Rules: The Hidden Tax Trap When U.S. Companies Move Stock, IP, or Operations Abroad
Section 367 overrides corporate non-recognition rules the moment U.S. property crosses into a foreign corporation, forcing immediate gain on outbound asset and IP transfers. This guide explains Sections 367(a), (b), (d), and (e), the GRA and Form 8838 deferral path, the 10% Form 926 penalty, the TCJA expansion to goodwill and workforce in place, and the 2024 final regulations on IP repatriation.
Step Transaction Doctrine: How the IRS Collapses Multi-Step Tax Plans
The step transaction doctrine lets the IRS treat a sequence of formally separate steps as one taxable transaction. This guide explains the three tests courts apply — end result, mutual interdependence, and binding commitment — the landmark cases (Gregory v. Helvering, Court Holding, Kimbell-Diamond), the 2026 transactions most exposed (1031 drop-and-swaps, pre-sale entity conversions, gifts before the estate exemption sunset), and the documentation habits that keep multi-step plans defensible.
Section 1248 Deemed Dividend on CFC Stock Sales: A U.S. Shareholder's Guide to E&P, GILTI, and PTEP
Section 1248 recharacterizes part of a U.S. shareholder's gain on the sale of CFC stock as a dividend, capped by the corporation's earnings and profits and reduced by PTEP from GILTI and Subpart F inclusions. This guide explains who is affected, how the lookback works, why corporate sellers can prefer the recharacterization for Section 245A, and how to build a defensible work paper.
Personal Goodwill in C-Corp Asset Sales: Martin Ice Cream, Norwalk, Bross Trucking, and Howard
Personal goodwill carve-outs let C-corporation shareholders pay 23.8% capital gains instead of 40%+ combined tax on a portion of an asset sale. Martin Ice Cream, Norwalk, and Bross Trucking show when the allocation survives; Howard shows when an employment-and-noncompete agreement quietly destroys it.
Personal Goodwill in M&A Asset Sales: How Martin Ice Cream and Norwalk Help Owners Avoid Double Taxation
Personal goodwill, anchored in the Martin Ice Cream and Norwalk Tax Court decisions, lets closely held C corporation owners shift a portion of an asset-sale price out of the corporate tax layer and onto the shareholder as long-term capital gain. This guide explains the doctrine, when it works, the documentation that survives an IRS audit, and the mistakes that have sunk allocations.
Section 355 Tax-Free Corporate Spinoffs: How to Split Up a Business Without Triggering a Single Dollar of Federal Tax
A breakdown of Section 355 of the Internal Revenue Code — the four statutory tests, three judicial doctrines, and the anti-Morris Trust two-year trap — illustrated with the GE, 3M Solventum, and Kellanova spinoffs.
Section 382 NOL Limitation After Ownership Change: How Venture-Backed Startups Preserve Net Operating Loss Carryforwards Through Equity Rounds
Section 382 caps a startup's pre-ownership-change net operating loss deductions at the pre-change fair market value multiplied by the long-term tax-exempt rate (about 3.56 percent in February 2026), triggered when 5 percent shareholders collectively gain more than 50 percentage points over a rolling three-year testing period.
Section 197 Intangibles: 15-Year Amortization for Goodwill, Customer Lists, and Non-Competes
Section 197 requires buyers in a taxable asset acquisition to amortize acquired intangibles — goodwill, customer lists, workforce in place, covenants not to compete — straight-line over 180 months. This guide walks through Form 8594 purchase price allocation, the anti-churning rules for related-party deals, the no-loss rule on dispositions, and Form 4562 reporting across the full 15-year cycle.
Section 368 Tax-Free Reorganizations: How Type A Mergers, Type B Stock Swaps, and Type C Asset Deals Defer Tax in Strategic M&A
Section 368 defines seven reorganization types (A through G) that defer corporate and shareholder tax in M&A. This guide covers the 40% Continuity of Interest test, Type A statutory mergers, Type B stock-for-stock swaps with the 80% control requirement, Type C asset deals, and forward/reverse triangular merger structures with their consideration limits.
ASC 350 Goodwill Impairment: A Private Company Guide to the Amortization Alternative and Triggering-Event Testing
ASC 350 lets private companies amortize goodwill over up to ten years and test for impairment only when a triggering event occurs. This guide walks through ASU 2014-02 and 2021-03 elections, the single-step Step One quantitative test after ASU 2017-04, and how to keep auditors and lenders aligned.