A United States tax analysis of the Microsoft/SOFTIMAGE and Symantec/Delrina transactions
Article Abstract:
The structures of Microsoft Corp's acquisition of SOFTIMAGE and Symantec's acquisition of Delrina demonstrate how recapitalization can be used ensure favorable US and Canadian tax treatment in cross-border acquisitions. The Canadian target corporation shareholders receive stapled securities that mimic stock in the US acquiring corporation and that can later be exchanged for common stock in the acquiring corporation. This provides Canadian shareholders with tax deferral because they are receiving Canadian property and provides US holders of target stock with tax-free reorganization treatment.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1996
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Property contributions may constitute prohibited transactions: an analysis of Keystone
Article Abstract:
The US Supreme Court decided in Commissioner v. Keystone Consolidated Industries that an employer contribution of unencumbered property to fund a defined benefit pension plan was a prohibited transaction under IRC section 4975. The decision distinguishes between voluntary contributions and those made to ensure the pension plan is not underfunded. This decision is based on a misunderstanding of section 4975 and should be overturned by Congress because it has potentially serious consequences in that it prevents employers from fully funding pension plans with unencumbered property.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1993
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Social security contributions, accumulations, and payments: a case study
Article Abstract:
Comparison of accounting methods used to determine the number of years before a Social Security beneficiary receives a full return on contributions reveals that reforms should focus on investments such as stocks that offer higher long-term yields. Reform proposals that split Social Security tax funds into payments to beneficiaries and private investment of funds are most likely to ensure that the Social Security system will survive. Under traditional and inflation-adjusted accounting methods, beneficiaries begin to draw benefits in excess of contributions within ten years.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1996
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