A transaction generally will be considered non-taxable to the seller or target firm's shareholder if it involves the purchase of the target's stock or assets for substantially all cash, notes, or some other nonequity consideration.

Question

Quizplus · Accepted Answer

A transaction involving the purchase of the target's stock or assets for substantially all cash, notes, or some other nonequity consideration is generally considered a taxable event for the seller or target firm's shareholder, as it typically results in a realization event where gains or losses are recognized for tax purposes.

A Transaction Generally Will Be Considered Non-Taxable to the Seller