Series 79: 11.2.3.1. Forms Of Consideration

Taken from our Series 79 Online Guide

11.2.3.1. Forms of Consideration

The form of consideration, or just consideration, is the type of payment the buyer offers—typically either cash, the buyer’s own securities, or a combination of the two. The form of consideration has a significant impact on tax issues. For a transaction to be considered tax-free, the consideration must consist largely or entirely of stock. Cash payments are taxable. Even in a tax-free reorganization (see below), whatever portion of the consideration is cash will be taxable. The seller’s

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