Generally, it is more advantageous
for the vendor to sell shares of the operating corporation than to sell
the assets of such a corporation. From a tax perspective, a significant
tax advantage exists in the form of a lifetime capital gains
exemption of over $860,000.00 that may apply to each individual shareholder if the shares
qualify. Selling assets may also trigger certain tax consequences (a
common form of tax liability for example, being referred to as “recapture”).
There may also be a liability advantage to the seller.
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The general opinions expressed herein are for
information purposes only and are not to be relied on. Individuals are
encouraged to seek legal advice as it relates to their specific fact
scenario to ensure they are fully aware of their legal rights and obligations.
