Artificial Intelligence (AI) and other technology deals are increasingly using a so-called hire and license out (HALO) structure for mergers and acquisitions (M&A), which presents many important tax issues for the founders, management, and investors of a selling startup company to address. In HALO deals, a sizeable market incumbent will hire the core workforce of a startup target company in conjunction with a fully up-front paid non-exclusive license of the underlying intellectual property (IP) of the target instead of acquiring the startup’s stock or business assets directly.

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