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Stock Purchase Tax Allocation Clause

Book Publication Date: Oct 2013
Description: Allocating tax liability between buyers and sellers in a stock purchase agreement is generally straightforward. However, sometimes a tax year will begin before the closing date and end after the closing date. The sample clause included here states that for purposes of tax liability the closing date will be treated as the end of the seller's tax year and the beginning of the buyer's tax year.
Type: Contract Clauses
PLI Item #: 60080
Practice Area: Corporate law, Corporate tax, Mergers and acquisitions, Partnership tax, Tax, Tax shelters, Taxable acquisitions

Keywords: "stock purchase agreement"; tax; "tax representations"; "closing date"; buyer; seller; indemnity; "representations and warranties"; "tax position"; "mergers and acquisitions"; "M&A"; target; "tax period"; "tax returns"; "straddle year"

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