Which of the following is not true of a forward triangular cash merger?
A) It is considered by the IRS as a purchase of target assets.
B) It is generally followed by a liquidation of the target firm.
C) Target shareholders must recognize a gain or loss as if they had sold their shares.
D) The target's tax attributes carry over to the buyer.
E) Taxes are paid by the target firm on any gain on the sale of its assets and again by shareholders who receive a liquidating dividend.

Question

Quizplus · Accepted Answer

In a forward triangular cash merger, the target's tax attributes do not carry over to the buyer. The other statements are true regarding the tax implications and structure of such a merger.

Which of the Following Is Not True of a Forward