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Archive for November 19th, 2007

Losing $75K in 7 Seconds: Purchase Price Allocation 101

Monday, November 19th, 2007

Last month our business valuation department was engaged by a pest control client, Kevin, owner of XYZ Pest Control, to advise him on setting up a stock gifting program. His goals are to gift stock annually to his children over the next 10 years or so, taking advantage of the Federal Annual Gift Tax exemption as a vehicle for saving for their college education. When we reviewed the financial and operational documents on XYZ, we realized that Kevin had made a few acquisitions over the last few years. XYZ’s most recent was the acquisition of a competitor - the purchase of the assets of an S corporation for $1,050,000. Upon digging into the numbers a little deeper, we realized something quite peculiarly, though not particularly surprising. The buyer and seller had allocated a very large portion of the purchase price, $480,000 to be exact, to a non-competition agreement. In this article, you are going to learn why this alarmed us and what you can do to avoid tax mistakes while doing deals.

The Texas Pest Control Association Announced 2008 Election Results

Monday, November 19th, 2007

President will be Mitch Wassom of Collin Services, Plano, Texas.

President Elect will be Van Wilson of J Bar V Greenlawn, Lubbock,
Texas. (more…)

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