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The Role of Taxes in Determining a Divestiture Approach

The tax basis to the parent private company of a potential divestiture target is an important consideration in the restructuring procedure. The higher the tax basis the more likely the asset will be divested in a direct taxable sale while a lower tax basis will be more incentives towards a tax-free alternative such as a spin-off, split-off, or equity carve-out.

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The Private Company Life CycleThe Second Boom and Bust Cycle ‘92-’02
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