Know The IRS Stance On Acquisition Deduction Issues

Law360, New York (May 7, 2013, 1:21 PM EDT) -- Corporate tax concerns dictate the structure of many merger and acquisition transactions. A recurring issue in the consolidated tax return context is whether the buyer group will be able to claim a deduction for certain transaction-related expenses or whether a deduction must be claimed by the target, which often turns on application of the “which day?” rule.

When a target becomes part of the buyer’s consolidated tax group, the target normally has two short tax years (the tax year ending on the date of the transaction...
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