What are the tax consequences of a taxable merger?

Name: What are the tax consequences of a taxable merger?
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Question

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In a taxable merger, selling shareholders must recognize any capital gain on their shares. Option A is incorrect because deferring capital gain is only applicable in a tax-free merger. Option B is also incorrect because depreciation tax shields can change in a taxable merger. Option D is incorrect because goodwill may be amortized over a specific period of time.

What Are the Tax Consequences of a Taxable Merger