Legal Blog

M&A Nugget: Tax Forms

Purchase agreements, employment agreements, bills of sale and non-compete agreements are but a few of the myriad of closing documents signed on the purchase and sale of a business.  In addition, there are several tax forms that come into play in a business transaction that need to be prepared and signed at or shortly after closing, including the following:

  1. Forms 8023 and 8883 – when the purchaser makes an election to treat a stock purchase as an asset acquisition, known as a 338 election, these forms should be completed;
  2. Form 8594 –  this form is required in an asset acquisition to set forth the agreement of the purchaser and the seller for the allocation of the purchase price among the assets required;
  3. FIRPTA Certificate – tax must be withheld from the proceeds of real estate sold by a foreign person.  This form must be completed to provide for the tax withholding or to provide for an exemption; and
  4. W-9 – if the purchaser will be making payments to the seller other than purchase price payments, such as employment or consulting compensation, this form must be signed by the seller.

Completion of all required tax forms will insure that the tax consequences of the transaction are as both sides intend.

 

 

 

 

If you have any questions about this or any other M&A issue,
please contact Glenn Solomon at gsolomon@offitkurman.com or 443-738-1522.

 

ABOUT GLENN D. SOLOMON

Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.

 

 

 

 

 

 

 

ABOUT OFFIT KURMAN

Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 130 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our ten offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.

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