Would you recommend taxable or tax-free acquisition

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Reference no: EM132195001

Smithco is considering acquiring the assets of Jonesco. It had considered buying Jonesco stock, but Smithco is concerned about unknown or contingent liabilities. Smithco is a New Jersey Company, which because it does mail-order sales has no nexus in other states. Jonesco is a California mail-order company, also with no nexus in other states. Jonesco has substantially appreciated assets. Would you recommend a taxable or tax-free acquisition, from a state income tax perspective? Why? What other tax issues should be considered?

Assume the same facts above, except that a taxable versus tax-free stock acquisition is being considered.

Reference no: EM132195001

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