Asset Sale Versus Stock Sale

This problem tests whether you understand how different transaction structures transfer ownership, how they affect the buyer’s tax basis, and how they change the seller’s tax outcome. In investment banking interviews, candidates are often expected to explain the legal mechanics of each structure and the tax tradeoffs, including why one structure can create stepped up asset basis for the buyer while another leaves the buyer with the target’s existing basis. It also checks whether you know when a 338(h)(10) election can make a stock deal receive asset sale tax treatment, and why that matters in negotiations, valuation, and deal pricing.