Recently, Sierra Eckman, Opsahl Dawson Shareholder and CPA wrote a column in the Vancouver business journal. If you’re planning on buying or selling a business in 2019, it’s a must-read!
In the article, you’ll learn strategies for planning and executing the transfer of a business. Sierra weighs the pros and cons of stock and asset transactions, as well as more advanced topics like depreciation and tax liabilities.
3 Key Tips & Top Takeaways
- In a stock transaction, any gain will be taxed at capital gains rates and may not produce a favorable outcome from the buyer’s perspective
- Installment transactions may work to the seller’s advantage by spreading out payments and profits, resulting in lower effective tax rates.
- If the transaction involves an allocation to a noncompete clause or goodwill asset class, it’s important to remember that goodwill is taxed at a preferential capital gains rates in the year the cash is received.