All depends on inside basis. Might want to explore a 338 election if feasible.

Michael, thank you for the response. I wasn't familiar with a 338 election, though complicated, I think it would be a feasible workaround.

(Here is a summary of the 338 election if anyone else isn't familiar)
https://www.forbes.com/sites/anthonynitti[redacted]tax-geek-tuesday-a-buyers-best-friend-understanding-the-section-338h10-election/#193a5e5c4fa0

it is all about the tax impact on the seller. your best bet is to have an accountant (make seller do it) do analysis

338 election is still regarded as asset sale for seller purposes.

Lots of factors here, glad to get on a call to learn more facts and to discuss. Many times the seller only knows the general rule of sell stock not assets to maximize after-tax proceeds. But in many cases there are options. Email me at [redacted] and we can set up a date and time to talk.

While looking into a 338(h)(10), also look at a 336(e) which may work when a 338 does not.

Look into a 338 (h[redacted]Election. Some thoughts on structuring below. All things being equal, buyers prefer an asset sale while sellers prefer a stock sale. An asset sale is advantageous to the buyer as it allows them a step-up in basis in the acquired assets, which accelerates greater depreciation and offers an opportunity to reduce taxable income. It also helps the buyer avoid assuming any unwanted or unknown liabilities, which can occur in a stock sale where any “past skeletons” of the seller become the buyer’s problem. From the perspective of the seller, a stock sale is advantageous because the proceeds are taxed at favorable capital gains rates and, if a C-Corporation, spares them from double taxation. 338 (h[redacted]Election In simple terms, a 338(h)(10) is a tax election for a qualified stock purchase (QSP), which recharacterizes a stock purchase as an asset purchase for federal tax purposes. It remains a stock purchase for all other legal purposes, such as contracts and licensing (more on that later). Advantages for Buyers The buyer receives a tax basis in the acquired assets equal to the purchase price and can depreciate at their purchased value, often times at an accelerated rate (tax reform supercharged these accelerated rates for qualifying assets placed into service after September 27, 2017, and before January 1, 2023, to “full expensing”). Further, because the transaction is treated as if assets were purchased, the buyer is able to record goodwill and enjoy amortization expense over the next 15 years for tax purposes. These factors all translate into significant tax benefits for the buyer. In addition to the favorable tax characteristics, buyers are also able to avoid the change of control issues that can be present in traditional asset deals. Because a 338(h)(10) transaction is still a stock sale for legal purposes (other than for tax treatment), all contracts and licenses that would otherwise need to go through the assignment process in an asset deal are transferred uninterrupted as with a traditional stock transaction. Advantages for Sellers Frankly, sellers would likely still prefer to have a pure stock deal with no 338(h)(10) election. This is simply due to the concession being made in the form of tax benefits being enjoyed by the buyer rather than the seller. As a result, the 338(h)(10) election is often a compromise on behalf of a seller in order to close the deal. Having said that, as part of the negotiation, sellers will frequently demand a higher purchase price in response to a 338(h)(10) election, as additional compensation to offset the additional tax burden they will incur. If the cost (to the seller) outweighs the benefit (to the buyer), a 338(h)(10) election may not make sense. Limitations and Requirements • Seller must be either a U.S. corporate subsidiary of a parent company or an S-Corporation. • The buyer and seller (all stockholders) must jointly make the election – it cannot be unilaterally made by one side. • For legal purposes, a 338(h)(10) election remains a stock sale despite being deemed an asset sale for tax purposes. Thus, while there are favorable tax benefits, it does not eliminate the buyer’s exposure to known or unknown liabilities included in the acquisition. • Buyer must be a corporation making a QSP – at least 80 percent of the seller’s stock needs to be acquired by the buyer. • Section 338(h)(10) of the Internal Revenue Code can provide significant tax benefits to a buyer of 80% or more of a target corporation. A 338(h)(10) election allows a buyer of stock of an S corporation or a corporation within a consolidated group to treat the transaction as an acquisition of 100% of the assets of the target for tax purposes. The deemed asset sale for tax purposes increases the tax basis of the target’s assets which can significantly reduce the buyer’s future taxable income.

It's more than just the tax implications, like C corp double taxation on assets, etc. You need to really vet all the possible liabilities you will be assuming in a stock deal. These will have to be scrubbed in your reps and warranties in a stock deal moreso than assets. For instance environmental exposure. For instance, a 1990's deal might mention an "environmental" rep..... a 2000 deal might have a 5-10 year limit of exposure on the seller (the seller being on the hook[redacted]whereas today, you'll have probably unlimited timewise liability on the seller.