CPA Blog

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

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Published: Tuesday, 19 September 2023 15:31

Written by Phillip Strickler, CPA.CITP

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 (or ownership interest) sale. A buyer can directly purchase a seller’s ownership interest if the target business is operated as a C or S corporation, a partnership, or a limited liability company (LLC) that’s treated as a partnership for tax purposes.

The now-permanent 21% corporate federal income tax rate under the Tax Cuts and Jobs Act (TCJA) makes buying the stock of a C corporation somewhat more attractive. Reasons: The corporation will pay less tax and generate more after-tax income. Plus, any built-in gains from appreciated corporate assets will be taxed at a lower rate when they’re eventually sold.

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4 best practices for effective strategic planning meetings

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Published: Wednesday, 13 September 2023 08:57

Written by Phillip Strickler, CPA.CITP

It’s not uncommon for employees to grumble about having to attend too many meetings. Sometimes they have a point; an excessive number of meetings can become a problem at some companies. However, there’s one kind of meeting that business owners and their leadership teams should never scrimp on: strategic planning.

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Investment swings: What’s the tax impact?

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Published: Tuesday, 12 September 2023 15:03

Written by Phillip Strickler, CPA.CITP

If your investments have fluctuated wildly this year, you may have already recognized some significant gains and losses. But nothing is decided tax-wise until year end when the final results of your trades will reveal your 2023 tax situation. Here’s what you need to know to avoid tax surprises.

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Could your business benefit from interim financial reporting?

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Published: Wednesday, 06 September 2023 11:16

Written by Phillip Strickler, CPA.CITP

When many business owners see the term “financial reporting,” they immediately think of their year-end financial statements. And, indeed, properly prepared financial statements generated at least once a year are critical.

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