Difference Between Asset Sale And Stock Sale For Tax Purposes In Travis
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In an asset sale, the ownership of these acquired assets would change hands, with the buyer negotiating separately for each asset. In a stock sale, ownership of such assets does not change hands in the same way. The target still retains its ownership typically, even if the target has a new owner.
Stock purchases refer to buying shares of the selling business. Asset deals occur when the buyer acquires the target company's operating assets. The seller retains complete business ownership following an asset transaction, and no business ownership is transferred to the buyer.
Asset transaction means any transaction or related series of transactions whereby the Issuer transfers certain of its assets to ReGen AG through a sale, capital contribution or otherwise.
In an asset sale, the ownership of these acquired assets would change hands, with the buyer negotiating separately for each asset. In a stock sale, ownership of such assets does not change hands in the same way. The target still retains its ownership typically, even if the target has a new owner.
The benefit of an asset sale, from the buyer's perspective, is that it can select which assets and liabilities to acquire in the deal, compared to a stock sale or merger, where the buyer acquires all the assets and liabilities of the target.
Unlike an asset sale, stock sales do not require numerous separate conveyances of each individual asset because the title of each asset lies within the corporation. With stock sales, buyers lose the ability to gain a stepped up basis in the assets and thus do not get to re-depreciate certain assets.
