Avoid missteps during purchase price allocation

In a taxable asset transaction, once the diligence process is over and purchase price adjustments have been negotiated, the total purchase price must still be allocated to all of the tangible and intangible assets acquired, some of which may not have been previously recorded on the target’s books or have tax basis. This process may lead to tension if buyers’ and sellers’ priorities conflict regarding the value ascribed to certain assets, as these allocations can impact each party’s perceived success of the transaction. 

In a newly published article for Bloomberg Tax, CohnReznick’s Jeremy Swan and Matthew B. Teadore discuss purchase price allocation considerations for buyers and sellers, as well as how the 2017 Tax Cuts and Jobs Act (TCJA) added another layer of complexity to the process.

Read their article at BloombergTax.com, or download the PDF below.

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