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Taxable acquisition

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Definition of Taxable acquisition

Taxable Acquisition Image 1

Taxable acquisition

A merger or consolidation that is not a tax-fee acquisition. The selling shareholders are
treated as having sold their shares.



Related Terms:

Taxable transaction

Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.


acquisition

Takeover of a firm by purchase of that firm’s common
stock or assets.


Acquisition of assets

A merger or consolidation in which an acquirer purchases the selling firm's assets.


Acquisition of stock

A merger or consolidation in which an acquirer purchases the acquiree's stock.


Company Acquisitions

Assets acquired to create money. May include plant, machinery and equipment, shares of another company etc.



Corporate acquisition

The acquisition of one firm by anther firm.


Corporate taxable equivalent

Rate of return required on a par bond to produce the same after-tax yield to
maturity that the premium or discount bond quoted would.


Taxable Acquisition Image 2

Creative Acquisition Accounting

The allocation to expense of a greater portion of the price
paid for another company in an acquisition in an effort to reduce acquisition-year earnings and
boost future-year earnings. acquisition-year expense charges include purchased in-process research
and development and an overly aggressive accrual of costs required to effect the acquisition.


Equivalent taxable yield

The yield that must be offered on a taxable bond issue to give the same after-tax
yield as a tax-exempt issue.


Horizontal acquisition

Merger between two companies producing similar goods or services.


Policy Acquisition Costs

Costs incurred by insurance companies in signing new policies, including expenditures on commissions and other selling expenses, promotion expenses, premium
taxes, and certain underwriting expenses. Refer also to customer, member, or subscriber
acquisition costs.


Roth IRA. An IRA account whose earnings are not taxable at all under certain

circumstances.


Tax free acquisition

A merger or consolidation in which 1) the acquirer's tax basis in each asset whose
ownership is transferred in the transaction is generally the same as the acquiree's, and 2) each seller who
receives only stock does not have to pay any tax on the gain he realizes until the shares are sold.


Taxable income

Gross income less a set of deductions.


Taxable Income

Income subject to income tax as reported on the tax return.


Vertical acquisition

acquisition in which the acquired firm and the acquiring firm are at different steps in the
production process.



 

 

 

 

 

 

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