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Blank Check Companies More Often Yield Tax Benefits for Founders

March 22, 2021, 2:00 PM

An arrangement delivering tax benefits to early owners of a company once it goes public is more common in SPAC deals than in traditional initial public offerings, according to recent research.

Special purpose acquisition companies—which are created to take a target company public by merging with it—have soared in popularity in the past year, representing about half the U.S. market for initial public offerings and raising more money in 2020 than they have in previous years combined, according to SPAC Research.

Investors in the vehicles, also known as blank check companies, can land in tax traps when ...

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