Question

what are the five tax benefits in merger and acquisition

Answer 1

1. Accumulated Losses of Target company can utilized by Merger Company.

2. Current Profits of Merger company can set off with current losses of Target Company.

3. Nontaxable stock transactions may produce a tax benefit by allowing shareholders in the acquired company to attain a more diversified portfolio without realizing their shares and paying capital gains taxes.

4. There are clear tax benefits available at the corporate level in the form of stepped-up asset bases and the increased utilization of tax losses and tax credits.

5. In a small minority of cases, these benefits are large in comparison to the value of the acquired company, suggesting that taxes provided motivation.

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