S corp stock sale - - "effective date for tax purposes"

My client is 100% owner of S corp and is selling the stock of this corp.

The lawyer who wrote the stock purchase agreement identifies the closing date as 7/1/2020 but then goes on to say:

"The effective date of the transfer of assets for tax-related purposes will be __________ (to be determined by CPA)."


I'm telling the buyer's attorney to scratch this sentence because the effective date for tax purposes will be the actual date of closing and not some arbitrary date for "tax purposes".

The buyer's CPA is telling everyone I'm wrong. Am I wrong?

Your client is selling the stock, so the sentence discussing transfer of assets is meaningless.

And confusing. We have enough trouble trying to get clarity on just what was sold. I just had a 1.1 mil deal where even the freaking attorneys just couldn't get it straight, confusing the heck out of the client and me. And even tho' it was a straight up asset sale, the buyer took over the GL system and bank account of the seller! What a mess.....

My client is 100% owner of S corp and is selling the stock of this corp.

The lawyer who wrote the stock purchase agreement identifies the closing date as 7/1/2020 but then goes on to say:

"The effective date of the transfer of assets for tax-related purposes will be __________ (to be determined by CPA)."


I'm telling the buyer's attorney to scratch this sentence because the effective date for tax purposes will be the actual date of closing and not some arbitrary date for "tax purposes".

The buyer's CPA is telling everyone I'm wrong. Am I wrong?

I would never accept that.... tell him get the date in writing, signed by both parties. I have seen deals done in June and backdated to January 1 BUT all parties were agreed in writing.