Cash merger, Business combination in which the acquiring corporation buys all the assets

Cash merger

Business combination in which the acquiring corporation buys all the assets of the target, recording them at fair market values. The target is absorbed into the acquiring corpora- tion, and has gains on the sales of the assets that appear on its last tax return. In addition, the target shareholder who receives the distributions from the liquidation-must pay tax on the difference between their original investment and the amount of the distribution. A cash merger gives result in double taxation.

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