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part 1
The process of buying out
a business partner can be
very complex and very taxing
– pardon the pun. This two
part series looks at the basics
of buying out a business
partner and the resulting tax
repercussions. Part 1 discusses
the valuation of your business
and the type of professionals
who provide this type of service.
There are accountants and
other business professionals
such as attorneys and business
consultants that specialize in
business valuations and that’s all
they do. In other words, there
isn’t a quick and easy formula
used to arrive at a magical
number, it’s an involved process
and skimping on professional
advice can leave a significant
amount of money on the table.
There are various types of
business valuation experts, such
as a CVA, or a Certified Valuation
Analyst. This credential is
earned by those who have
studied business valuations
and passed a test administered
by the National Association of
Certified Valuators and Analysts.
These individuals may be CPA’s
or hold other business degrees
with substantial experience in
this area of business.
In addition, and regardless of
how large or small your business
buyout may be, you should have
a business attorney involved
in the entire process. There
are many details of the sale
that an attorney can help you
address such as non-compete
or confidentiality agreements.
Also, be sure to work with a tax
accountant who understands
the tax repercussions of such a
transaction. How you structure
the buyout can affect the taxes
you pay in the end.
Business Partner Buyout
Understanding the Basics
By Tina Moe, CPA
SOAR TO SUCCESS
/
A
ugust
2016
/
Core Business Strategy