Year-End Tax Planning With a Potential Sale Looming

The end of the calendar is typically one of the busiest periods in the M&A industry. There are usually tax and other considerations, in completing a transaction at year end or the beginning of the new year. This year is no exception and, in fact, we are busier than usual as 2015 has just surpassed 2007 as the most active year for M&A activity, and we anticipate that this trend will carry over into 2016.

Last month, I attended an industry conference which was attended by several dozen Private Equity Groups looking for acquisitions and, based on my conversations with them, they are very active in their in efforts to source quality businesses to acquire. If you are contemplating the sale of a business within the next several years, you should consult with your advisors to determine if it would be in your best interests to take advantage of the current Sellers' market.

Whether you are contemplating the sale of your business in the near future or not, it is typically advisable to visit with your tax advisor prior to the end of your tax year. This month's featured article comes from Patrick Stephens, CPA, a Tax Manager at Stockman, Kast, Ryan, LLC, a well-regarded CPA firm that we have worked with in the transfer of many businesses over the last twenty plus years. Patrick shares with us several suggestions for year-end financial and tax planning. In addition to the relevancy of Patrick's comments at this time of year, I would like to add that most buyers and lenders go back at least three years in analyzing and performing due diligence on a transaction, so it is better to start sooner, rather than later in your planning process.

(originally published in the December 2015 eNewsletter)