Merger and acquisition activity in many industries slowed during 2020 due to COVID-19. But analysts expect it to improve in 2021 as the country comes out of the pandemic. If you are considering such a transaction, it's important to understand the tax implications of buying or selling a business. Two ways to arrange a deal Under current tax law, a transaction can basically be structured in two ways: (1) Stock (or ownership interest) A buyer can directly purchase a seller’s ownership interest if the target business is operated as a C or S corporation, a partnership, or a limited liability company (LLC) that’s treated as a partnership for tax purposes. The current 21% corporate federal income tax rate makes buying the stock of a C corporation somewhat more attractive. Reasons:...