Although the new tax law has only been in effect since January 1, we are already seeing its impact on M&A activity. This year there have already been $325 billion in bids, the most activity since 2000. If you are thinking about pursuing M&A in 2018, here are four things to keep in mind:
- The corporate tax rate has been reduced from 35% to 21%. Companies will have more cash, which may be used for pursuing deals.
- Under Section 168(k) there is now an immediate write up for the cost of acquired intangible property, even used property. This means the allocation of purchase price of acquired assets is even more important.
- There is a now a form of territorial tax on earnings from most foreign subsidiaries.
- Tax treatment of intangible property has dramatically changed so companies have less of an incentive to move intangibles to tax havens
While the full effects of tax reform are still being realized, it looks like 2018 will be a busy year for M&A.
Have a question about tax reform and M&A? Join our webinar with tax attorney Alexander Lee on March 15. Alexander will cover how to navigate tax reform and answer your questions live on the webinar.
Date: Thursday, March 15
Time: 12:30 PM EDT / 9:30 AM PDT
CPE credit available.