When buying or selling a business, both parties should be concerned about their after-tax considerations. In a traditional acquisition, the buyer and seller may have opposing interests regarding the structure of the transaction. For instance, a buyer may want to purchase the seller’s assets, thereby obtaining increased basis for depreciation and amortization deductions, as well as sheltering itself from the seller’s historical liabilities. The seller, on the other hand, would typically prefer a stock sale in order to benefit from the capital gain rates on the entire gain. There are an infinite number of variations on these themes, involving things such as consulting agreements, covenants not to compete and personal goodwill, among others.
These considerations demonstrate the need for careful planning and the need to have trusted advisors guide you through this process. MK & Associates leverages their understanding of these complex transactions to minimize and defer tax considerations for sellers and maximize the tax benefits for buyers. We bring years of experience working on M&A deals — allowing our clients to know they are in good hands throughout the sale or acquisition process. Make sure your best interests are being looked out for.
For assistance planning for, or analyzing the tax impact of a deal, contact your local MK Associates office today.