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Advanced Tax Considerations in Negotiating, Structuring and Documenting M&A Transactions

OnDemand Webinar (116 minutes)

Consider key tax issues, new tax opportunities, and avoidable tax traps when negotiating, structuring, and documenting M&A transactions in light of changes made by both the 2017 Tax Act and recently promulgated Treasury Regulations.Tax consequences are a crucial factor impacting the negotiation, structuring, and documentation of M&A deals. At the outset of a deal, counsel and other M&A advisers must understand the tax ramifications of a planned transaction, including how the 2017 Tax Cuts & Jobs Act (TCJA) has changed the tax landscape, in order to achieve optimal tax results for their clients. A broad array of buy-side and sell-side issues should be identified and evaluated by M&A tax counsel, including: the benefits and risks of a stock deal vs. an asset deal; the advantages and disadvantages of structuring a transaction as taxable as opposed to tax free; the tax implications of so-called earn-outs and other deferred payment arrangements; and how tax indemnification provisions should be drafted to avoid or resolve these issues. In 2017, the tax stakes of both domestic and international mergers, acquisitions, joint ventures, and other strategic alliances, were fundamentally altered by important changes in the U.S. tax law, not least among them, the 14-percentage point drop in the top U.S. corporate tax rate. However, many other important amendments to the Internal Revenue Code impact the way M&A deals should be structured. The changes to the U.S. international tax provisions were among the most sweeping, so that today, practitioners advising clients on cross-border deals should possess a firm understanding of the most recently issued Treasury regulations, and other guidance, all of which is likely to affect how a client's international transaction should be structured for optimal tax results. Listen as our experienced M&A panel analyzes key tax issues from both the buyer's and the seller's perspectives. The panel will highlight new structures to think about, tax opportunities to consider, as well as traps to avoid, when negotiating, structuring, and documenting an M&A transaction. The panel will consider both purely domestic deals, as well as ones with complex international tax implications. Illustrative examples will be provided.

Authors

Pamela A. Fuller, Royse Law Firm Roger Royse, Royse Law Firm

Agenda

Taxable Acquisition Strategies After the 2017 U.S. Tax Cuts and Jobs Act

• 338(h)(10)

• 336(e)

• Uses of LLCs

• S Corporation Strategies

• Personal Goodwill

Tax Free Reorganizations Post-2017 TCJA

• Double Mergers

• Type D Spinoffs

• Continuity and Earn Outs

• Use of § 351 and § 368 to Avoid Tax

Selected TCJA Provisions' Effects on Structuring M&A Transactions: A Closer Look

• Tax Rates; Bonus and Accelerated Depreciation

• Self-Created Intangibles

• NOLs - New Limitations and Effects on Pricing Deals

• New Limitations on Interest Deductions

International Tax Considerations in Structuring Cross-Border Mandas Post TCJA

• Overview: International Tax Provisions Adopted by 2017 TCJA

• New IRC § 965 - Effects of the Mandatory Transition Tax on Cross-Border M&A Deal Structures and Pricing

• Expansion of Subpart F Rules Applicable to Controlled Foreign Corporations (CFCs)

• New IRC § 951A - Global Intangible Low Taxed Income Tax (GILTI): M&A Planning Considerations

• Foreign Derived Intangible Income - FDII

• Acquiring or Selling/Disposing of a U.S.-Owned Foreign Subsidiary - Planning Considerations

• Use of Hybrid Arrangements (Entities and Instruments) in M&A

• New § 59A - Base Erosion Anti-Abuse Tax (BEAT)

• Dispositions by Foreign Partners of Interests in Partnerships Engaged in a U.S. Trade or Business