Are you considering selling your business? Have you considered the tax issues associated with that sale? A seemingly typical sales negotiation and transaction can go bad if tax implications haven’t been property analyzed up front by a qualified professional. It is extremely difficult – and sometimes impossible – to roll back the clock on a negative outcome. Asking important tax questions beforehand can save you wasted time and effort. For example:
Can the purchasing party actually afford to acquire the business if the deal is not structured as an asset purchase?
How much does the seller need to actually net in cash monies after taxes to feel good about the deal?
Will the selling party be willing to accept part cash with the rest equity?
Can the equity be rolled over tax-free?
Do we have minority owners that are not cashing out and will roll over their equity to be part of the new ownership group?
Complicating all these issues is the reality that the tax code is full of irregular code provisions that quite often do not come to light until the deal is nearly complete. Restructuring and back pedaling to make all parties happy is
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What is more precious than the workforce that you have trained and nurtured over the years? Quite often, human capital-related tax issues stemming from ill-advised structuring and planning strategies create employee resentment. This resentment can jeopardize employee goodwill and loyalty, affecting the overall long-term stability of your business model. As the saying goes, “you are only as good as your people.” When planning and negotiating a business transaction, you must carefully monitor how employee compensation taxation matters will affect the disposition of the whipsaw effect, which can adversely affect workforce synergy, impeding productivity and creativity.
Ready to negotiate the sale of your business? First you should sit down with your tax advisor to gain a general understanding of the major tax considerations and constraints that should be evaluated. Partnerships, LLCs, C Corps, and S Corps all have various entity-specific tax consequences that should be evaluated before making any decisions.
The decision analysis process, however, is now more complicated because the top long-term capital gain rate was raised to 20% versus 15%, and there is an additional 3.8% Medicare tax applicable to certain passive investors. In the case of LLC sale transactions, your choices are limited and the transaction will generally be accounted for tax reporting purposes as an asset sale. In the case of a corporation, depending on whether the entity is an S Corporation or you are selling one of the subsidiaries within a consolidated group, it can qualify as Continue Reading >>
Many government contractors assume that they are immune from sales tax, but that’s rarely the case, and states hungry for revenue are eager to reap the rewards of noncompliance. The rules pertaining to sales tax on government contracts
can be a complex issue for even the most informed contractor, since state laws vary significantly and are changing constantly. Failure to pay can result in significant tax liabilities, so it is an important factor to take into consideration during the contract pricing phase.
Join Aronson LLC’s government contracting tax experts on July 17th for a free webinar that will help you better understand your tax obligations and minimize risks. Attendees will learn what factors to consider when identifying contracts that may create a sales tax obligation and how to properly price contracts upfront to avoid penalties. The panel will discuss:
Register today to reserve your spot at this informative online presentation!
Date: July 17, 2013
Location: Via Webex