Sellers who are structured as C corporations generally prefer to sell assets for cash than acquirer stock because of more favorable tax treatment.

Question

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Sellers structured as C corporations often prefer to sell stock rather than assets due to the potential for double taxation on asset sales. In an asset sale, the corporation is taxed on any gains from the sale, and then shareholders are taxed again when the proceeds are distributed, making stock sales more tax-efficient for them.

Sellers Who Are Structured as C Corporations Generally Prefer to Sell