1 edition of The tax aspects of acquiring a business found in the catalog.
The tax aspects of acquiring a business
W. Eugene Seago
Written in English
Tax considerations are seldom the determining factor in deciding whether to purchase a business. However, taxes often affect the price and form (e.g., purchase of stock or purchase of assets) the acquisition takes. This is true because the form of the transaction affects the buyer"s present value of after-tax future cash flows and therefore the price the seller will receive. The tax implications of the purchase and sale of a business largely depend upon who the buyer and seller are and what is being bought and sold. The business being purchased may be an unincorporated proprietorship, a single owner limited liability company (LLC), a partnership (or an LLC with more than one member), a C corporation, or an S corporation. The form of the sale (asset or stock) affects the character of the seller"s gain (ordinary or capital) and the buyer"s basis of the assets. The buyer"s basis will eventually become tax deductions. Just as the price the buyer is willing to pay is based on the projected present value of the after-tax proceeds, the price that is acceptable to the seller will depend upon his or her expected after-tax proceeds. Each party must be aware of the other party"s tax consequences to achieve a rational agreement.
Includes bibliographical references and index.
|Statement||W. Eugene Seago|
|Series||Financial accounting, auditing, and taxation collection|
|The Physical Object|
|Number of Pages||91|
The Tax Effects of Business Combinations 7. Foreign Operations .. 8. Income Tax Issues Associated with Share-Based Payment Arrangements This book is designed to assist companies and others in understanding the temporary differences that exist at the acquisition date. , Clarified guidance related to. This article will discuss issues that can affect the tax treatment of a book sale for one or both parties. The legal nature of parties involved in the transfer of an advisory practice is one of the central determinants of the transaction’s tax outcome. It comes down to clarifying whether the parties are employees, self-employed or incorporated.
Additional Physical Format: Online version: Clark, John. Tax aspects of buying and selling a business. [New York: Research Institute of America, ]. This article is intended to alert readers to some potential traps and opportunities regarding S corporation tax treatment in a dealership stock buy/sell situation. Readers should consult with their qualified tax professional regarding the specific issues before contemplating a buy/sell. This article was written in .
The following excerpt is from Mark J. Kohler’s book The Tax and Legal you identify possible issues and present solutions, but ultimately you and your business partner(s) need to take. EXECUTIVE SUMMARY Following 9/11 companies of all sizes increased their purchases of business aircraft to make travel easier and more convenient for employees and executives. CPAs should be aware of the tax, financial, operational and regulatory issues involved in acquiring and operating a business aircraft. The first step is to.
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Acquiring another business does present challenges and risk, however, and effective tax planning should be an integral component of the buying process. Businesses are generally purchased either as an entity (stock or partnership interests) or as a group of assets.
How to deal with the IRS when buying an existing business. The IRS can play a significant role in determining the prospective profitability of a business.
By Robert Keim, C.P.A., and the MOTHER. Feel free to contact a local Henry+Horne tax professional who is ready to assist you in understanding the book-to-tax differences for your company. We serve a wide variety of industries and are capable of giving professional insight on financial and tax issues as well as sound business advice.
When selling a business, the biggest tax liability for the seller is CGT (Capital Gains Tax). Here the vendor is usually advised to seek Entrepreneurs’ relief to reduce the rate of CGT payable and perhaps also look at forms of roll-over relief, or hold-over relief as a means of minimising and deferring CGT liability.
Tom Gallagher and Dennis Cohen identify some of the income tax issues purchasers of distressed debt of non-publicly traded entities face when making individual investments, acquiring a portfolio of distressed debt at an unallocated price, and considering how to fund the acquisitions.
2 Introduction zBuying or selling a business is a complex transaction. There are many tax variables to consider, such as: – Structure of transaction (i.e. asset sale versus a stock sale) – Goals of both Buyer and Seller – Types of entities involved as buyer and seller (corporations, partnerships, LLCs, individuals.
Editor’s note: This is the second in a two-part series on succession planning for advisors. This column explores the issues associated with buying a book of business; the first column focused on some of the issues associated with selling a book of business.
With a substantial number of advisors heading toward retirement, a younger advisor looking to find a book of business for sale does not.
merger is a business combination in which the acquiring firm absorbs a second firm, and the acquiring firm remains in business as a combination of the two merged firms. The acquiring firm usually maintains its name and identity. Mergers are legally straightforward because there is usually a single bidder and payment is made primarily with stock.
Buy BookBuy eBookRequest Desk Copy MoreThe Tax Aspects of Acquiring a Business is a guide writ- ten to the tax considerations that must be weighed when acquiring an existing business, whether the business is conducted as a proprietorship, partner- ship, limited liability company, S corporation, or a C corporation.
The book looks at the transactions from the point of view of the seller as. Buy books, tools, case studies, and articles on leadership, strategy, innovation, and other business and management topics Tax Aspects of Acquiring a Business.
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The Tax Aspects of Acquiring a Business by W. Eugene Seago Get The Tax Aspects of Acquiring a Business now with O’Reilly online learning. O’Reilly members experience live online training, plus books, videos, and digital content from + publishers. The tax aspects of acquiring a business.
[W Eugene Seago] -- "Tax considerations are seldom the determining factor in deciding whether to purchase a business. However, taxes often affect the price and form (e.g., purchase of stock or purchase of assets) the.
Additionally, the tax elections under IRC Section require that a minimum of 80% of the seller's stock is acquired by the acquiring entity, and special rules apply concerning asset transfers in.
Tax considerations such as available tax pools, including non-capital loss carry-forwards and investment tax credits, may also provide motivation. However, such considerations generally require that the same or similar business be carried on with a reasonable expectation of profit in order to be claimed by the buyer after the acquisition.
What many brokers fail to consider, however, is the impact that the assignment of the selling price will have on their tax bill. Most insurance agency sales transactions are an “asset sale” (as opposed to a “stock sale”), which can fall into one of seven asset classifications for deemed or actual asset acquisition.
Instead of starting from scratch, you can usually find someone with a business who wants to sell. Buying an established enterprise may be more costly, but less risky, than starting a new one.
See All Buying Options Focuses on understand tax concepts rather than on memorization of detailed tax rules. Instead of focusing solely on the individual taxpayer, this book covers a wide range of tax concepts — including a broad introduction to various types of tax entities and an emphasis on the relationship between financial and tax.
Extensive attention is paid to the tax aspects and consequences of the conveyances. Tax Guide for Buying and Selling a Business enables you to confidently plan and determine the tax consequences of a transaction.
It includes major revisions of over commentaries, forms, charts, and. Book Description The tax aspects of buying and selling companies in the UK amounts to around 40% of this type of corporate activity.
This book uses straightforward case studies to highlight the issues and more important strategies that are likely to have a significant impact on the overall taxation position.
Basic Tax Issues in Acquisition Transactions Michael L. Schler 1 Table of Contents Acquiring will acquire all the business of Target, i.e., there are no retained assets that will go to the Shareholders. References to tax are to federal income tax.
See I.R.C. § All references to I.R.C. are to the I.R.C. as in effect on January. Thus, business asset sales in New York are subject to sales tax.
For this reason, it is of great importance to separately delineate each asset and its sales price in a purchase contract occurring in the state. It is possible that other sales tax exemptions may be. Taxpayer is selling a customer list, (book of business), to an unrelated party for a mutually agree-able price.
Taxpayer did not previously purchase the book from anyone and thus has not been amortizing it as a Sec intangible.If your business is organized as a partnership or corporation, Formsand S all include Schedule M-1, which is used to reconcile your book net income with your tax net income.
Further, often times financial statements will include "deferred tax asset" and "deferred tax liability" accounts to help track temporary book to tax.