experience with tax impacts for seller rolling equity in asset sale?

searcher profile

November 13, 2023

by a searcher from Stanford University - Graduate School of Business in Houston, TX, USA

Does anyone have experience optimizing tax impacts for sellers who will roll some portion of equity (say 20%) in an asset sale? ie, deferring tax on the rolled portion?
Looking at LLC "drop down" method or "partial rollover and partial interest purchase" methods, other?
Thank you!

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Reply by an investor
from Harvard University in Santa Fe, NM, USA
This is definitely doable. Here is a good article on the drop down structure. https://www.williamsmullen.com/news/tax-free-rollovers-private-ma-transactions-llc-asset-vs.-stock-drop-down-examples. Obviously, you'll want to engage skilled tax counsel to assist with structuring when you get to documentation stage.
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