NOL CarryOver to Buyer

[Roland Slugg]

There is a widely held belief that the SELLER (whether the corporation or owners via secondary transactions) will have to pay additional tax on the inflation-adjusted selling price of the assets themselves.

Well, I don't know how "widely held" that belief is, or who holds it, but I am not one of them.

If assets are depreciable equipment, inflation adjusted prices are not so much a factor exclusive of recapture.

And that means .... ???

[Corduroy Frog]

Explanation

And that means .... ???

The comparison was made between equipment and real estate, with respect to appreciated values. Usually Equipment (sec.1245) does not rise in value and depreciates faster. Real estate (sec. 1250) normally DOES rise in value and depreciates slower.

The implication was the sale of equipment is less likely to have capital gains than real estate.

[ttbtaxes]

There are a few scenarios when the buyer may want/have to buy the stock rather than the assets of a corporation:

1) Contracts, in the name of the seller corporation, may not be assignable.

2) Licenses, in the name of the seller corporation, would no longer be valid.

Short of an unusual circumstance, I don't see why a garden-variety buyer would ever entertain a stock purchase. It is not tax favorable and the buyer assumes all liabilities,
both known and unknown, of the seller. The legal fees alone to enforce a hold-harmless agreement would be staggering.