Some types of transactions are not eligible for the BEA process, even though ultimate control of a property is changing hands. At the same time, practitioners frequently overlook opportunities for BEA-based exemptions in transfers of property among affiliated entities, with potentially disastrous consequences. Whether this is a blessing or a burden is a question of the corporation s liability status. Conversely, if the corporation is not liable beforehand, it will still be not liable after the closing. The stock purchaser has no opportunity to conduct a BEA, but unlike an asset purchaser, will suffer no adverse consequences for the omission.
Mergers present an analogous, if somewhat closer, question.
As with the stock purchase, neither Part 201 nor the regulations provide any guidance on how mergers are intended to fit into the BEA process. Also like the stock purchase, a statutory merger involves no conveyance of real property, but rather a top down change in the identity of a corporation. For this reason, most practitioners have treated the statutory merger as not eligible for the BEA process, with the same attendant liability considerations as described above for stock purchases. It should be recognized that this issue has yet to be definitively resolved by the legislature or the courts. An everyday transaction that often escapes attention is the transfer of real estate among affiliated entities.