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Buying and Selling Corporate Businesses - Using Installment Obligations

Overview

1.0 Credits
IN-PERSON

When a corporate business is sold it is very common for part of the consideration received to include an installment obligation of the buyer. Consider the tax consequences of using installment obligations as part of the sale of stock or assets of a corporation. Discuss both S corporations and C corporations. Evaluate the use of a contingent purchase price. Plus, analyze and identify tax planning opportunities.

Materials are provided as an ebook for this course.

Objectives

  • Understand the general approach of installment reporting of gain (IRC 453).
  • Discuss the tax consideration related to the installment sale of the stock of both S corporations and C corporations.
  • Review and evaluate the law related to the installment sale of assets of either an S corporation or a C corporation, including the decision on when to liquidate the corporation.
  • Analyze the tax law applicable when the installment note includes a contingent amount.
  • Identify and evaluate tax planning strategies and ideas.

Major Topics

  • Discussion of the law relevant to deferring gain using the installment method (IRC 453)
  • Description and analysis of the installment sale of the stock of both an S corporation and a C corporation
  • The use of an installment obligation related to the sale of the assets of both an S corporation and a C corporation including consideration of when to liquidate the corporation
  • Evaluation of the tax consequences of a note with a contingent amount
  • Tax planning opportunities and strategies

Prerequisite

An understanding of the taxation of corporations and S corporations.

Advanced Preparation

None.

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