There Are a Number of Key Tax Effects That Must

question 2

Essay

There are a number of key tax effects that must be considered during a business divestiture and acquisition, from the perspectives of both the vendor and the purchaser. Match the following tax considerations with the most appropriate answer from the list below. Use each answer only once.
Tax consideration:
1. A change in control will restrict the use of losses. _____
2. Capital gains and business income may occur in the business, reducing the after-tax proceeds. _____
3. The capital gain deduction may apply. _____
4. The cost base for assets is based on their market value. _____

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Definitions:

Unlimited Consumption

The action of consuming something without limits or restrictions.

Primary Source

A document or physical object which was created during the time under study.

Full-Fat Dairy

Dairy products made from milk with its natural fat content, as opposed to being skimmed or partially skimmed.

Nutrient-Dense Foods

Foods that have a high amount of nutrients but relatively few calories, emphasizing the quality of the nutrients they contain.