Capital Gains in M&A Transactions

Capital gains in mergers and acquisitions (M&A) refer to the profit made from selling an asset, such as shares in a company, for more than its purchase price. When a company is acquired, shareholders may receive cash or stock, and if this compensation exceeds their initial investment, they realize a capital gain. This gain is subject to taxes, which vary based on how long the asset was held. Understanding capital gains is important for investors to manage tax implications and evaluate the financial impact of the M&A transaction on their investments.