Is there a Tax Benefit to an Asset Purchase?
Another reason to use an asset purchase rather than an entity purchase is to obtain a stepped-up tax basis in the purchased assets, which may result in greater tax write offs for the buyer. When you purchase an entity, the tax basis of the entities assets may be unaffected and retain their fully or partially depreciated values. In general, the seller and the buyer may allocate the purchase price among the purchased assets and the allocation between unrelated parties will be respected by the IRS.
