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When a business is acquired, a buyer may structure the acquisition in a manner that results in an increase in the tax basis of that business's assets. Often, a seller will attempt to extract a higher price, or a buyer will offer a higher price, based on the purported value of this tax basis to a buyer. This article will describe some of the basic requirements related to obtaining this increase in tax basis, and then focus on how the value of this benefit can be analyzed, including certain factors that may unexpectedly impact that analysis.
Read "Obtaining a Higher Tax Basis: Acquisition Strategy or Trap?" (PDF).