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Plan For Any Unforeseen Taxes From Your Deal
By JoAnn Lombardi, PresidentVR Business Brokers/Mergers & Acquisitions
Unforeseen taxes can turn a good M&A transaction bad - and even result in the loss of thousands of dollars for buyers and sellers alike. Before you green-light a deal, consider how you'll structure it to offset such risks and maximize tax savings. 
Buyers and Sellers Beware 
With most acquisitions, either stock or assets are purchased. Buyers typically prefer asset transactions because they allow for a step-up in the target's basis for tax purposes and help avoid undisclosed tax and other liabilities.
Asset sales also are flexible, allowing buyers to purchase only the parts of the target company they want. And they can provide buyers with a bigger tax write-off. Buyers of depreciable assets can begin reducing their taxes right away by taking the depreciation expense. If, for example, a company pays $10 million to purchase assets with 10 years of remaining life, its taxable income can be reduced by $1 million each year for the next 10, using a straight line depreciation schedule.
Sellers, on the other hand, often prefer stock transactions, because they're subject to taxation at a relatively low capital gains rate. For sellers structured as C corporations, asset sales can be particularly unfavorable. C corporations are required to pay ordinary income tax on the amount by which the sale price of the assets exceeds their tax basis. What's more, when money from the sale is distributed as dividends, or the corporation is dissolved, the corporation's shareholders pay capital gains tax on the distributed money. C corporation sellers, therefore, typically try to negotiate for a stock sale. This way, gains are taxed once at the relatively low long-term capital gains rate of 20%.
Structure the Deal Carefully
The structure of an M&A deal can significantly affect the tax consequences for buyers and sellers. Typically, deals are structured as one of the following types of transactions:
Taxable. In this type, the buyer purchases a company's stock or assets and the company realizes a taxable gain or loss on the transaction.
Tax-deferred. Here, the buyer generally acquires stock or assets in exchange for stock in its own company. There's no immediate gain or loss to the seller or shareholders. Instead, the shareholders "carry over" their basis in their old stock to the new stock and realize a taxable gain or loss only on a taxable disposition of the new shares.
Making Your Cross-Border Acquisition Work 
By Peter C. King, CEO VR Business Brokers/Mergers & Acquisitions
American companies are seeking foreign acquisitions in greater numbers than ever before. The Bitcoin, cryptocurrency money, as new payment and migration to Internet-based organizations means cross-border deals are increasingly viable. If an international deal is possible in your company’s future, start thinking now about how you’ll handle the complex cultural differences that sometimes sink foreign M&As.  
Go With What You Know
Domestic M&A's are already challenging without having to deal with foreign legal and regulatory systems and a workforce whose makeup and culture can be quite different from what you’re used to. Even with a Canadian or British company, there will likely be some elements of friction - such as the persistence of cultural stereotypes and differing perspectives on office culture. But you can take preventive steps to make a cross-border transaction and integration go a little more smoothly.
Most important is to avoid the complications related to buying a business that’s radically different from your own. Making your international acquisition in an unfamiliar industry can, in fact, be dangerous to your bottom line. Instead, target companies:
  • That are in the same or a related industry; 
  • That make or offer similar or complementary products and services; 
  • Whose workforces resemble your own in terms of size, types of positions, and education levels;  
  • Whose management structures are roughly parallel to yours.
The more your businesses are in alignment, the less you’ll have to discuss during negotiations. Integration, too, is likely to be easier.
Why Confidentiality Is Crucial to The Sale of Your Business
By Ryan Jordan, Owner of VR Business Brokers Office in Calgary, Canada
There are many key factors that will have an impact on your ability to sell your business. Your list price, the general market conditions, the number of businesses in your industry that are currently for sale, and ease of financing, to name a few. However, confidentiality is the core basis and universal best practice towards successfully navigating the process of selling your business. It allows you to be marketed without compromising your identity, while also creating a framework of expectations and rules for exchanging information with potential buyers.
What’s the big deal about confidentiality?
Regardless of your industry, it’s crucial that you maintain confidentiality throughout the sale process. This allows your broker to market your business without telling anybody who you actually are. We accomplish this by ensuring the initial marketing material is descriptive but generic. You don’t want staff, customers, or competitors figuring out that it’s you, however, a potential purchaser needs enough information to be prompted into action.
Business owners cannot actively canvas potential buyers or approach their industry without compromising their confidentiality and letting the world know they are for sale. When people hear a business is for sale, they usually assume the worst; staff feels their jobs are at risk and may move on, customers often look elsewhere to spend their money and competitors are then free to use that knowledge to their advantage. The consequences of a breach are to be avoided.
Selling Your Company? Be Sure Your Cybersecurity is On Point
It happens all too often: a buyer pulls out of a deal or lowers their bid after discovering a seller’s cybersecurity shortcomings during the M&A process.
And the issue is only getting worse due to a recent surge in ransomware attacks. The volume of information security incidents has soared in recent years, and over half of key decisionmakers say they have encountered a cybersecurity issue that put a deal in jeopardy, according to Forescout Technologies.
Whether a seller suffers a breach years before a deal or during one, the consequences can be devastating. We’ve seen buyers walk away or drastically alter the deal structure including by reducing the purchase price. 
Fortunately, a thoughtful approach to cybersecurity can help sellers stay on track even through an untimely incident. Amid a significant increase in cyber incidents, and ransomware attacks in particular, here is what to know when preparing for a sale.
Management Firm - Highly Profitable for Sale in Midwest
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?For more information contact: Matt Essig at matt@vrlowcountry.com
VR Located in Minneapolis, MN Sold a 41 Unit Assisted Living Facility for $6,105,000.
This 41-unit 50 resident capacity, comprehensive Home Care Licensed Assisted Living Facility located in the central Minnesota area was about 3 years old. The facility has had steady occupancy and revenue growth stabilized in 2021. The licensing capacity was 66 which presents a tremendous value growth opportunity compared to 50 resident-occupancy within the existing structure.
Congratulations to Young Bebus for your successful closing.
For more information contact: youngb@vrtwincities.com.
Thinking of selling your business or looking for an established 
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