What sellers often miss
Many owners assume tax-related provisions are technical matters best left entirely to attorneys and accountants. While expert advice is essential, sellers should understand the economic consequences of major tax decisions. A buyer requesting a specific tax election is rarely doing so for administrative convenience alone. The request is usually motivated by value.
The takeaway
Whenever a buyer requests a tax election, ask a simple question: Who benefits, and how much is that benefit worth? Understanding the answer can help prevent you from giving away value that could otherwise be negotiated as part of the transaction. The most successful sellers treat tax benefits the same way they treat any other valuable asset: they recognize them, quantify them, and negotiate them accordingly.
Illustrative, not your deal. Where the book uses dollar figures, they are there to show how something works, not to describe your business. Your banker, your accountant, and your attorney will put real numbers to your own situation. Full note.
Terms this chapter uses
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