Planning for Sales and Purchases of Businesses and Real Estate
Tax is largely transaction driven – the client and accountant need to talk before and during a transaction in order to achieve the desired results. Careful review of the tax consequences of purchases and sales needs to be undertaken.
For many years, the main tax objective for business owners in structuring sales of businesses has been to take advantage of the capital gains exemption available to shield gains of up to $835,716 per person. At RMR, we have structured a number of sales to achieve multiple exemptions within each family. Due to reductions in corporate tax rates, the best result is now often achieved through an asset sale. The specifics of the buyers’ and sellers’ circumstances need to be reviewed and analyzed in order to make the best decision.
For real estate transactions, the structuring of acquisitions is particularly important, especially in co-ownership and partnership situations. Reviewing the benefits and risks of the alternatives is important so that taxes can be minimized both during the ownership period and upon disposition.