Transactions Support – Due Diligence and M&A Planning

Companies contemplating the acquisition or disposition of a business or business segment must be diligent for undiscovered material state income, sales tax and property tax liabilities. Even an asset purchase does not protect the buyer from acquiring the seller’s sales tax liabilities or other tax liabilities visa vi transferee liability. Quantifying these liabilities before the close of escrow is critical.

Create an audit trail.

Regardless of which side of the transaction your company is on, we can help identify “pitfalls” as well as uncover “hidden gems.” A properly documented acquisition or disposition can help resolve IRS or state and county inquiries, while improper documentation and structuring of a transfer cost can lead to unfavorable audit adjustments.

Below are three areas that are subcomponents of the buy side of transaction support services: Reduce real estate tax liabilities (refer to our cost segregation page).

Real estate taxes may be reduced by separating tangible personal property from the non-residential real property being constructed. Even if a jurisdiction imposes a personal property tax on business property, tax savings may be realized due to substantially shorter personal property lives and faster devaluation of assets with proper asset classification.

Specific sales tax exemptions (refer to our sales tax page).

Substantial sales tax savings may be achieved by classifying tangible personal property as industrial machinery and equipment. Many states provide a sales tax exemption to a company purchasing qualifying industrial machinery and equipment. Sales or use tax exemptions represent immediate and permanent cash savings.

Property Tax Services (refer to our property tax page).

Be certain you are obtaining the correct personal and real property tax renditions from the county assessor. Ensure that your property classifications for building improvements, real property improvements, leasehold improvements, machinery, trade fixtures, leases are appropriately classified allowed by law and agree to your asset reports

For more information call Michael Nunez 949.242.0587