Sound Accounting and Tax Advice Is Critical

Want to maximize what you get when you sell your business?  Do you have a written succession plan? When is the last time you met with your accountant to discuss it?   Our experienced business accountants at Maicher CPA Pllc can help you create and execute a plan to maximize your buy-out and minimize your tax bill.

How can an accountant help?   

First, accountants are key consultants in providing objective advice concerning many overarching questions.  What will succession look like?  Will it be a sale to outsiders?   Or a sale to insiders? When will the business be in the best financial condition for a transition?    Who will be the decision-makers when you leave (a particularly important issue for installment buy-outs)?  

Second, there’s always the critical question of value.   What sale price can your business justify?   A professional business valuation will likely be done at some point.  Buyers and their lenders will also do their due diligence to determine value by reviewing your tax filings and other financial statements.  Therefore, to maximize your business’s value and attractiveness, it’s important your tax returns and your financial statements are accurate and professionally prepared by an accountant.   

Third, business succession always involves tax questions for selling owners.  Getting good advice from an accountant to the following questions can dramatically impact your tax bill.   Stock sale vs. asset sale? How should the purchase price be allocated over various assets? What are the best ways to maximize capital gain treatment and minimize ordinary income treatment?   Does an installment sale make sense? Additionally, business succession inevitably triggers another round of financial and tax issues involving personal estate planning. Accountants can help with those issues as well.    

If you’re a business owner who’s thinking about selling in the next few months or in the next five years, set up a meeting with one of our professionals at Maicher CPA Pllc.  We can help you with a business succession plan which maximizes price and minimizes taxes.

Sources:

“How To Write A Business Succession Plan,” Forbes (May 14, 2014).

“Succession Planning and CPAs’ Golden Opportunity,” Journal of Accountancy, Scott Miller (October 1, 2015).

“An Owner’s Guide To Creating A Business Succession Plan,” Forbes (Nov 30, 2016).