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It’s important to understand how taxes factor into M&A transactions

Assets, C Corporation, Federal Income Tax, LLC, Merger & Acquisition, Partnerships, Past-Through Entities, S Corporation, Small Business, Small Business Owners, Small Business Stock, Small Business Tax Tips, Stocks, Tax Considerations for Selling Your Business / Douglas Freeman

In recent years, merger and acquisition activity has been strong in many industries. If your business is considering merging with or acquiring another business, it’s important to understand how the transaction will be taxed under current law. Stocks vs. assets. From a tax standpoint, a transaction can basically be structured in two ways: 1. Stock […]

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Update on depreciating business assets

Assets, Business Deductions, Business Equipment, Depreciation Deduction (Section 179), Qualified Business Income Deducton (QBI), Small Business, Small Business Owners, Small Business Tax Tips, Tax Cuts and Job Acts (TCJA) / Douglas Freeman

Update on depreciating business assets C The Tax Cuts and Jobs Act liberalized the rules for depreciating business assets. However, the amounts change every year due to inflation adjustments. And due to high inflation, the adjustments for 2023 were big. Here are the numbers that small business owners need to know. Section 179 deductions. For

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Divorcing business owners should pay attention to the tax consequences

Assets, Capital Gains, Divorce, Small Business Owners, Small Business Stock, Small Business Tax Tips, Small Business Tips / Douglas Freeman

If you’re getting a divorce, you know the process is generally filled with stress. But if you’re a business owner, tax issues can complicate matters even more. Your business ownership interest is one of your biggest personal assets and in many cases, your marital property will include all or part of it. Transferring property tax-free

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Inheriting stock or other assets? You’ll receive a favorable “stepped-up basis”

Assets, Estate Planning, Estate Tax, Federal Estate Tax, Stocks, Tax Planning / Douglas Freeman

If you’re planning your estate, or you’ve recently inherited assets, you may be unsure of the “cost” (or “basis”) for tax purposes. How do the rules work? Under the current fair market value basis rules (also known as the “step-up and step-down” rules), an heir receives a basis in inherited property equal to its date-of-death

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Benefits of a living trust for your estate

Assets, Estate Planning, Federal Estate Tax, Federal Income Tax, Living Trust / Douglas Freeman

You may think you don’t need to make any estate planning moves because of the generous federal estate tax exemption of $12.92 million for 2023 (effectively $25.84 million if you’re married). However, if you have significant assets, you should consider establishing a living trust to avoid probate. Probate is a court-supervised legal process intended to

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Key tax issues in M&A transactions

Assets, Business Income Tax, Capital Gains, Federal Income Tax, LLC, Merger & Acquisition, Partnerships, S Corporation, Small Business, Small Business Tax Tips, Sole Proprietors, Stocks, Taxes 2023 / Douglas Freeman

Merger and acquisition activity dropped dramatically last year due to rising interest rates and a slowing economy. The total value of M&A transactions in North America in 2022 was down 41.4% from 2021, according to S&P Global Market Intelligence. But some analysts expect 2023 to see increased M&A activity in certain industries. If you’re considering

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Intangible assets: How must the costs incurred be capitalized?

Assets, Business Income Tax, Income Tax, Intangible Assets, Small Business, Tax / Douglas Freeman

These days, most businesses have some intangible assets. The tax treatment of these assets can be complex. What makes intangibles so complicated? IRS regulations require the capitalization of costs to: Acquire or create an intangible asset, Create or enhance a separate, distinct intangible asset, Create or enhance a “future benefit” identified in IRS guidance as

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Separating your business from its real estate

Assets, Business Income Tax, C Corporation, Capital Gains, Estate Planning, Income Tax, LLC, Partnerships, Past-Through Entities, Real Estate, Small Business Owners / Douglas Freeman

Does your business need real estate to conduct operations? Or does it otherwise hold property and put the title in the name of the business? You may want to rethink this approach. Any short-term benefits may be outweighed by the tax, liability, and estate planning advantages of separating real estate ownership from the business. Tax

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How do taxes factor into an M&A transaction?

Assets, C Corporation, Federal Taxes, Income Tax, LLC, Merger & Acquisition, Partnerships, S Corporation, Small Business, Stocks / Douglas Freeman

Although merger and acquisition activity has been down in 2022, according to various reports, there are still companies being bought and sold. If your business is considering merging with or acquiring another business, it’s important to understand how the transaction will be taxed under current law. Stocks vs. assets. From a tax standpoint, a transaction

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Taking the opposite approach: Ways your business can accelerate taxable income and defer deductions

Assets, Business Income Tax, Deductions, Federal Income Tax, LLC, Partnerships, Past-Through Entities, S Corporation, Small Business, Small Business Owners / Douglas Freeman

Typically, businesses want to delay recognition of taxable income into future years and accelerate deductions into the current year. But when is it prudent to do the opposite? And why would you want to? One reason might be tax law changes that raise tax rates. There have been discussions in Washington about raising the corporate

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