Hidden tax costs of buying stock of a professional practice
Weber, R.M.
Journal of Medical Practice Management Mpm 25(4): 235-239
2010
ISSN/ISBN: 8755-0229 PMID: 20222260 Document Number: 646885
Almost everyone realizes that the sale of an asset will generate tax consequences. But did you know that the purchase of a professional practice can result in higher taxes if the transaction is structured and valued incorrectly? This article examines the tax implications of acquiring a practice by comparing the purchase of assets versus the purchase of stock. Not all practices are corporations but for those that are, buyers will pay the purchase price with after-tax dollars. This type of sale results in a higher total cost to the buyer purchasing stock rather than the assets of a corporation.