Accounting & the 3 Statements
In an asset deal (or 338(h)(10) election) versus a stock deal, why might no DTL be created — and why do buyers like asset deals?
Model answer
In an ASSET deal (or a stock deal with a Section 338(h)(10)/336(e) election), the buyer gets a STEPPED-UP tax basis equal to fair value — book and tax bases match, so the write-ups ARE tax-deductible…
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