Handling Deferred Revenue When Selling Your Business

Share Button

One of the most complicated tax accounting items to handle in the context of an M&A transaction is deferred revenue. In the below scenario, we assume the affected taxpayer reports on the accrual basis and uses the deferral method permitted under IRS Revenue Procedure 2004-34. This method permits the deferral of cash payments received in advance over a two-year period.

In a taxable sales transaction involving asset sale or equivalent asset sale tax election, and/or stepped-up transaction form, the described deferred revenue item is generally beyond the scope of this blog and is recognized in full by the selling party. This …read more

Read more here:: Tax


has written 181 post in this blog.

Share Button