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Speaking Engagement

Tax Implications of the Inflation Reduction Act : Corporate AMT, Stock Repurchase Excise Tax, Impact on M&A Transactions

October 26, 2022

The Inflation Reduction Act (IRA) provides significant tax provisions impacting small businesses and corporations across various industries. This webinar will cover these new tax provisions, how they are applied to taxpayers, and their impact on certain M&A transactions and tax planning.

The IRA includes a variety of tax rules. The two primary tax provisions impacting M&A transactions, deal structures, and tax planning are (1) the new corporate alternative minimum tax imposed on certain corporations meeting a test based on their average annual adjusted financial statement income and (2) an excise tax imposed upon stock repurchases by publicly traded corporations.

The Corporate AMT is a tax of 15 percent on “adjusted financial statement income” rather than “adjusted taxable income” and becomes effective after December 31, 2022. In addition, the IRA will impose a one percent excise tax on specific repurchases of a corporation’s stock during the taxable year. The stock repurchase excise tax is charged on the fair market value of the repurchased stock, reduced by the fair market value of such corporation’s stock issued in the same taxable year. The new tax rules bring about various considerations, such as entities subject to the corporate AMT and excise tax, how they are calculated, available exceptions, and other crucial concerns.