tax effect of takeover?

  • Thread starter Thread starter jonathan k
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jonathan k

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in the US, company A would have $1 M of taxable income. But instead, it uses that $1M to buy company B outright. Before being bought, company B had only $1M in the bank. In other words, the end effect to company A is nil, cashwise. But what is the effect of this takeover on the stated income and taxes that company A pays?
 
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