A transaction is usually taxable to the target firm's shareholders,if the acquirer's stock is used to purchase at least 30% of the target firm's stock or assets.

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A transaction is typically taxable to the target firm's shareholders if it involves cash or other non-stock consideration. If the acquirer's stock is used, it may qualify as a tax-free reorganization under certain conditions, regardless of the percentage.

A Transaction Is Usually Taxable to the Target Firm's Shareholders,if