Section 8 Sale of Assets

• Library: Bus Trans 2005

A purchaser interested in buying an ongoing business may desire to do so by purchasing assets instead of stock. Although the decision to acquire the business by purchasing its assets may be motivated primarily by tax consequences (i.e., step-up in basis for purposes of depreciation), nontax factors can also be significant. By purchasing only the assets of a business, the buyer may selectively acquire only those assets considered to be valuable and necessary to the operation of the business. The buyer may also be able to avoid assuming the seller’s liabilities.

A sale of assets is typically documented in an asset sale agreement incorporating a bill of sale and an assignment of intangible assets. The sale of assets may be documented by a title transfer of each...