With the proliferation of various business forms -- corporations, S Corps, LLCs and other pass-through entities -- practitioners face increased incidence of inter-species combinations, and substantial tax consequences can arise from these mergers and conversions.
Merging an LLC with a corporation introduces tax consequences that are not as simple as a "check the box" election. Partnerships conversions to LLCs and vice versa are generally not a taxable event as long as certain requirements are met.
If properly structured, the conversion of a partnership into an LLC can be accomplished tax-free. Unlike a partnership conversion, however, a corporate conversion to an LLC or partnership is usually a taxable transaction with one or two levels of tax depending on whether it is a C or S corporation.
Jed A. Roher, Attorney at Godfrey & Kahn and Douglas J. Patch, Shareholder at Godfrey & Kahn, will provide tax counsel with an examination of federal income tax consequences of merging or converting LLCs and partnerships. We will provide best practices for entity selection that anticipates long-term business strategies and to structure mergers and acquisitions to optimize tax benefits.
The panel will review these and other key questions:
Why must the tax consequences of cross-entity mergers or conversions be considered at the entity formation stage? What unique tax issues arise in merging LLCs and corporations? Is it possible to convert corporations to LLCs without triggering adverse tax consequences? Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.