In an asset sale, the buyer selects specific assets and typically avoids inheriting liabilities. One major difference between a stock sale and asset sale is that the buyer typically does not acquire the existing liabilities of the selling company.An asset sale is the purchase of individual assets and liabilities, whereas a stock sale is the purchase of the owner's shares of a corporation. An asset sale is when the business's assets, such as inventory, are purchased. Generally, a stock sale is better for the seller and an asset sale is better for the buyer. An asset sale allows the transfer of specific assets and liabilities while the seller remains being owner of the legal entity. Sellers generally favor stock sales over asset sales because all the gains of a stock sale are taxed at the lower capital gains rate. In a stock sale, the buyer acquires equity from the target company's shareholders. Buyers typically prefer structuring acquisitions as asset deals because they receive a stepup in the basis of the acquired assets.