Isaac Grossman and Daniel Studin Share 6 Tips for Maximizing After-Tax Returns in Private M&A Deals in Law360

Partner Isaac Grossman, chair of Morrison Cohen’s Tax Practice, and Individual Client Services and Family Office Partner Daniel Studin co-authored an article in Law360 entitled “6 Tips for Maximizing After-Tax Returns in Private M&A Deals.”

In the article, Isaac and Daniel submit that tax planning for the sale of a private business should begin well before a deal is on the table and offer six suggestions that a potential seller should consider in order to maximize the after-tax proceeds of the transaction, including:

Target Cleanup – Clean up the target for any tax, financial or structural abnormalities.

Modeling – Model the potential tax on the transaction to help seller identify its preferred deal structure and key points for negotiating the deal.

Rollover Equity and Earnout Analysis – Determine seller’s willingness to accept different forms of consideration and how that would affect seller’s tax bill.

Residency; Estate Planning for Tax Minimization – Consider how speeding up a planned residency change and/or intrafamily gift and sale transactions could maximize the use of wealth transfer tax exemptions and limit income, estate, gift and generation-skipping transfer taxes, both at the time of the transaction and in seller’s ultimate estate.

Purchase Price Allocation – Mind purchase price allocation rules.

Investment of Proceeds – Consider how to invest proceeds of the transaction, and how that decision may affect the seller's tax bill.

Read the full article in the PDF, linked below.