Series 79 practice questionmediumStock vs Asset Purchases
In an asset purchase, which of the following is an advantage for the buyer compared to a stock purchase?
- AThe buyer can selectively assume only specified liabilities.✓ Correct answer
- BAll historical tax attributes automatically transfer to the buyer.
- CConsents are never required for contract assignments.
- DThe buyer always obtains a step-up in basis for assets regardless of structure.
Explanation
Why A — The buyer can selectively assume only specified liabilities.
Asset purchases allow the buyer to choose which liabilities to assume, unlike stock deals. However, tax attributes often do not transfer and consents may still be required, making those choices incorrect.
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