WhyteGlov Services: IRC Section 1060 asset acquisition

Donald Goldman, Vanessa Radick Makridis and Wan-Ting Wu

Journal of Accounting Education, 2016, vol. 37, issue C, 24-37

Abstract: An asset acquisition allows the buyer to choose specific assets that will be purchased and liabilities that will be assumed, thereby reducing risk of unwanted obligations. This case study draws attention to a critical issue in asset acquisitions under the U.S. federal tax system – the purchase price allocation process specified in IRC Section 1060. You are presented with a realistic situation involving the sale of a technology company's analytics division. To solve the case, you must leverage an understanding of depreciation, amortization, and purchase price allocation rules to assess the competing incentives of the buyer and seller and present the allocations preferred by each party. You must also perform analyses to determine whether a business case exists for the buyer to assume certain loss-generating contracts from the seller. This case develops critical thinking in interdisciplinary areas (tax, financial accounting, finance, and managerial accounting) and cultivates the ability to provide professional tax-planning advice.

Keywords: IRC Section 1060; Asset acquisition; Purchase price allocation; Tax planning; Incremental costs and benefits; Partnership taxation (search for similar items in EconPapers)
Date: 2016
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0748575115300233
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:joaced:v:37:y:2016:i:c:p:24-37

DOI: 10.1016/j.jaccedu.2016.07.003

Access Statistics for this article

Journal of Accounting Education is currently edited by Natalie Tatiana Churyk

More articles in Journal of Accounting Education from Elsevier
Bibliographic data for series maintained by Catherine Liu ().