Companies considering mergers or acquisitions will now need to account for the unused deduction of the companies they’re eyeing—or risk tripping an anti-abuse tax after the deal.
The IRS, in final rules (T.D. 9910; RIN: 1545-BP36) for the base erosion and anti-abuse tax (BEAT), said that some excess or unused deductions will be recognized as the base-erosive payments of the acquiring group, even though the creation of those deductions happened well before the acquisition transaction took place.
High-earning companies could have interest payments into the millions, and those will be recognized as BEAT payments once it enters ...
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