When approaching an S corporation for acquisition, there are unique tax issues to deal with regarding the target’s status. Fortunately, buyers are armed with a tax-free reorganization pursuant to Section 368(a) (1)(F) of the Internal Revenue Code (IRC), also known as the F Reorg.
In their latest article for the Pennsylvania CPA Journal, Michael Tighe, Meredith Thornton and Howard Braithwaite discuss how, when an F reorg is combined with a limited liability company (LLC) conversion, the issue of S corporation status becomes a nonfactor, allowing buyers and sellers to focus on other aspects of the acquisition.
Read the article here.
