Although not as popular as they once were, family limited partnerships remain an effective tool in reducing federal estate and gift taxes. In the Estate of Natale B. Giustina v. Commissioner, T.C. Memo. 2016-114, assets having a fair market value of $150,680,000 were valued...
We are frequently approached by people in the process of purchasing a business and request our advice with transaction structure and tax planning. Although the buyer has not conducted any due diligence or consulted a professional regarding the value of the business, negotiations have...
In a business sale, transaction structure can have a huge impact on the amount of taxes paid. With the proper structure, income taxes may be reduced by as much as 50%. This post discusses issues to consider when structuring a business sale....
This post reviews the four steps a business owner looking to sell can take to increase cash flow and reduce the buyer's perception of risk. It also highlights the four most common risk factors to cash flow....
I have helped many clients purchase businesses, and probably advised just as many to walk away from deals. What makes a deal good and what are the important factors in evaluating the purchase of a business? If you are considering purchasing a business,...
Does your business have an up to date buy-sell agreement? Buy-sell agreements are the most important, but perhaps most overlooked agreement that a business can have. These legal documents protect business owners when one owner leaves the company for any reason. This post covers...
If you're buying or selling a business, you need to understand the risks involved. Here's what you need to know about the impact of risk on business valuation....
Reducing costs can help you increase cash flow and, as a result, the value of your business.[/caption]
The value of a business is based on two factors: the expected future cash flow of the business and the risk that future cash flow will occur when and in the amounts expected.
Cash flow and risk are the meat and potatoes of business valuation. The valuation report that is produced is just a detailed analysis of these factors.
New Jersey courts allow double dipping: the nontitled spouse receives their share of business value, which is based on future income, and on top of that, receives a portion of that very same income as it is earned.[/caption]
In a divorce case in which one spouse owns a business, the business is generally subject to equitable distribution; that is, each spouse receives their equitable share of the value of the business. Practically speaking, this does not mean that the business is sold and the proceeds divided but rather, that the nontitled spouse receives money or other property equal to their equitable share of the business value. The problem arises in the conflict between the income stream used to value the business and the income stream used to calculate spousal support.
EBITDA is an acronym for Earnings Before (deduction of) Interest, Taxes, Depreciation and Amortization.
