# Compare Acquisition Structure Precedent > Guides tax structure analysis for a proposed acquisition by comparing the proposed structure against precedent transaction summaries, working through the basis step-up economics, and identifying entity-specific tax considerations such as accumulated earnings and profits. - Skill: `finchipaiorg/compare-acquisition-structure-precedent` (Agent Skill) - Install (CLI): `npx skillmds@latest add finchipaiorg/compare-acquisition-structure-precedent` - Raw SKILL.md: https://api.skillmd.com/api/skills/finchipaiorg/compare-acquisition-structure-precedent/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: FinchipAIOrg (https://skillmd.com/u/finchipaiorg) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/finchipaiorg/compare-acquisition-structure-precedent --- # Skill: Compare Proposed Acquisition Structure Against Precedent Transaction Summaries ## 1. Subject-matter triage - Identify the target’s tax status first, then test whether the proposed acquisition path produces an asset-step-up result or leaves the buyer with carryover basis. - Compare the proposed structure against each precedent transaction separately; do not blend unlike structures into a single generalized conclusion. - If the source set includes multiple acquisition paths, elections, or closing mechanics, treat each as a distinct scenario and analyze them one by one before recommending a preferred structure. - If the target has any prior corporate history, flag accumulated earnings and profits as a separate issue before discussing seller proceeds. ## 2. Failure modes the skill is correcting - Comparing deal structures at a high level without building a structured precedent table that shows, for each comparable transaction, the target entity type, deal structure, whether a step-up was obtained, and the allocation of purchase price to amortizable assets. - Failing to identify accumulated earnings and profits issues that may apply to an S-corporation target with a prior C-corporation history. - Omitting the present value computation of the amortization benefit, which is the quantitative measure used to evaluate structure selection. - Collapsing distinct seller-side and buyer-side tax consequences into a single “tax efficient” label. - Discussing precedent deals without tying each comparison back to the proposed structure’s tax result and downstream economics. ## 3. Legal frameworks / domain conventions that apply - Entity classification matters: analyze the target as an S corporation, C corporation, LLC, or partnership before assessing whether the transaction can be taxed as an asset deal, stock deal, or deemed asset acquisition. - Basis step-up analysis: compare consideration paid against the target’s existing tax basis in the acquired business assets, and adjust for liabilities where tax rules require it; the economic point is the incremental basis available for depreciation or amortization. - Section 197 and related depreciation rules: intangible assets commonly associated with acquisitions, including goodwill and similar amortizable intangibles, are generally amortized over the statutory period; tangible assets follow their own recovery periods under the depreciation rules. - S corporation acquisition analysis: where the structure supports a tax-efficient deemed asset acquisition, evaluate whether the buyer can obtain inside basis step-up without a literal asset transfer, and identify any election or reclassification mechanism that produces that result. - C corporation target analysis: if the target is, or was, a C corporation, assess whether the structure triggers corporate-level gain in addition to shareholder-level tax, and weigh that tax cost against any basis benefit. - Partnership or LLC target analysis: a direct asset purchase normally produces inside basis step-up; where the structure is not a straight asset acquisition, evaluate any adjustment election or analogous mechanism that affects inside basis. - Accumulated earnings and profits: for an S corporation with C corporation history, distributions can be dividend-like rather than basis recovery; evaluate whether a pre-closing distribution creates dividend risk or planning opportunity. - Present value of tax benefits: the value of basis step-up is measured by the discounted value of the future tax shield, not by the nominal amount of the step-up alone. - Controlling authorities should be cited for each tax proposition relied on, using the applicable Code provisions, Treasury regulations, or recognized authorities reflected in the source materials or standard tax practice. ## 4. Analytical scaffolds 1. Target entity type and history - Identify the legal entity type, any prior elections, and any prior corporate history that changes the tax profile. 2. Proposed acquisition structure - Describe the transaction mechanics and determine whether the structure is intended to produce a stock result, an asset result, or a deemed asset result for tax purposes. 3. Precedent-by-precedent comparison - For each precedent, note the target entity type, transaction form, whether step-up was achieved, how purchase price was allocated, and any structural feature that drove the tax outcome. - Keep each precedent separate; if the source materials contain more than one comparable, create one comparison row per deal. 4. Basis step-up economics - Determine the amount of incremental basis available from the proposed structure. - Separate the analysis by asset class so the amortization and depreciation consequences are visible. 5. Allocation and amortization analysis - Allocate consideration across relevant asset categories commonly used in tax allocations. - Identify the recovery period or amortization treatment for each category and explain which classes produce the largest tax shield. 6. Present value analysis - Discount the future tax shield from amortization and depreciation to present value. - Use the comparison to determine whether the proposed structure economically outperforms the precedents. 7. Seller-side tax cost - Analyze shareholder or seller-level gain recognition under the chosen structure. - If the target is a C corporation or has C corporation history, account for layered tax cost where relevant. 8. Accumulated E&P analysis - Determine whether any accumulated earnings and profits remain relevant. - Evaluate whether distributions before closing are tax-efficient or instead create dividend treatment risk. 9. Recommendation synthesis - State whether the proposed structure is tax-superior, tax-neutral, or tax-inferior relative to the precedents, and explain why. - Identify the principal tax risks, the structural lever that matters most, and the practical closing recommendation. ## 5. Vertical / structural / temporal relationships - Distinguish buyer-side economics from seller-side tax cost; a structure that maximizes step-up may still be unattractive if it creates excessive seller-level tax. - Tie each precedent to the proposed structure on the same axes: entity type, closing form, basis result, and amortization profile. - If there are multiple time-sensitive items in the source set, evaluate them in closing order: pre-closing distributions, election timing, signing-to-closing mechanics, and post-closing tax reporting. - When a prior entity history changes the current tax analysis, treat the historical period as vertically relevant to the current acquisition, not as background only. ## 6. Output structure conventions - Write a tax structure comparison memo in conventional memo form with: - short issue summary - proposed structure description - precedent comparison table - basis step-up and allocation analysis - present value of tax benefit analysis - seller-side tax analysis - accumulated earnings and profits analysis - recommendation and risk summary - Use a table for the precedent comparisons; one row per precedent, with columns for entity type, transaction form, step-up result, allocation / amortization profile, and distinguishing tax feature. - State any tax conclusion with the authority supporting it, not as a bare conclusion. - If the source set contains more than one scenario, present them in separate subsections or rows rather than averaging them. - End with a concise recommendation that identifies the preferred structure and the reason it is preferred. - If the deliverable is a memo, the file should be drafted as the operative work product, not as a placeholder outline.