Investorideas.com  big ideas for global investors Search www.investorideas.com
   Member Access       Sign-up       Listings        Stock Directories       Research       Cleantech       Tech Newsletter         Headlines        Video       New Ventures   




How to Ensure a Successful Business Or Property Sale in 2014

Surprise, It's Not Only About The Price!

Ideas get bigger when you share them...    Repost This

January 8, 2014 (www.investorideas.com newswire) Corporations are holding record levels of cash, interest rates are low and the housing market is rebounding. The result? Merger and acquisitions professionals are buying more businesses and high-end homes are selling faster -- Silicon Valley had a 26 percent increase in sales of $1.5 million-and-up houses in the first half of last year.

Join Investor Ideas Members to access the Renewable Energy stocks directory, water stocks, biotech stocks, defense stocks directories and the Insiders Corner

If you're considering selling a business or property in 2014 while business is good and before mortgage rates climb keep in mind: Focusing only on the price can short-change you in the long run.

"A lot of sellers are rushing to close the deal because they're worried about what may be around the corner," says attorney John Hartog of Hartog & Baer Trust and Estate Law (www.hartogbaer.com). "My first rule: Sell smart, not fast."

Sales of commercial properties were up 11 percent in the third quarter of last year, notes wealth management advisor Haitham "Hutch" Ashoo, CEO of Pillar Wealth Management (www.pillarwm.com).

"These sales can constitute a significant money event, so you have to consider how they may impact your future lifestyle needs," he says.

Adds CPA Jim Kohles, chairman of RINA accountancy corporation (www.rina.com):

"And you have to factor in how the transaction will affect your tax position. A great sales price doesn't look so good if it costs you more in taxes."

The three offer these tips for a successful business or residential property sale:

  • Know the true value of your business! A surprising number of entrepreneurs have an unrealistic idea of what their business is worth, says attorney Hartog. He tells of a man who owned a large chain of fast-food franchises. "He told everyone he knew the business was worth $150 million. After he died ... the business was sold for $35 million." That resulted in a drawn-out lawsuit by relatives of the man who accused the sellers of under-valuing the company. "Whether you're selling a business or real estate, get it appraised," Hartog advises. "It may sound obvious, but I've seen savvy business owners make big mistakes due to delusions of value."
  • How confident are you that the transaction will help you maintain the lifestyle you want? Before their clients take one step toward moving forward on a significant sale, wealth managers Ashoo and his partner, Chris Snyder, analyze how it might affect them in the future. "This is a must-do step. You need to have confidence that this money event will help you maintain your lifestyle until you're in your 90s," Ashoo says. He and Snyder run the transaction through an economic simulation factoring in major world and financial events since 1925, then use the information to project its future effect on the client. "If we're not 75- to 90 percent confident that it will help them reach their goals and maintain their lifestyle, we advise the develop a Plan B -- or not sell at all."
  • The pre-tax price and the after-tax price must both be part of the negotiations. Getting the highest price for your business won't result in the most net gain if you end up paying a high tax rate on the proceeds, notes accountant Kohles. If you sell the shares in your company, you'll pay a lower tax rate. If you sell the physical plant, you'll pay a higher rate. In the first case the buyer is on the losing end of the tax question; in the second you are. "You have to package the deal so that there are some tax advantages for both of you; this is where having professional help is crucial," he says. If you've taken depreciation on the equipment, you'll pay a higher rate. Sales of some assets, such as patents, are taxed at the lower capital gain rate. Selling your goodwill elements of the business that relate to the value of your relationships allows your buyer to write off depreciation.

About John Hartog, Haitham "Hutch" Ashoo & Jim Kohles: John Hartog is a partner at Hartog & Baer Trust and Estate Law in Orinda, Calif. He is a certified specialist in estate planning, trust and probate law, and taxation law. Haitham "Hutch" Ashoo is the CEO of Pillar Wealth Management, LLC, in Walnut Creek, Calif., specializing in client-centered wealth management. Jim Kohles is chairman of the board of RINA accountancy corporation of Walnut Creek, Calif. He is a certified public accountant specializing in business consulting, succession and retirement planning, and insurance. All three advise ultra affluent families.

If you would like to run the above article, please feel free to do so. I am able to provide images if you would like some to accompany it. If you're interested in interviewing any of the experts mentioned or having them write an exclusive article for you, let me know and I'll gladly work out details.

Ginny Grimsley
National Print Campaign Manager
News and Experts
3748 Turman Loop #101
Wesley Chapel, FL 33544
Tel: 727-443-7115, Extension 207
Twitter: @PrintcessGinny
www.newsandexperts.com

More Info:

This news is published on the Investorideas.com Newswire and its syndicated partner network

Publish Your News - Send a release
News now!

Get Free investor news and stock alerts: Sign up here

Published at the Investorideas.com Newswire - Big ideas for Global Investors

Disclaimer/ Disclosure:The Investorideas.com newswire is a third party publisher of news and research as well as creates original content as a news source. Original content created by investorideas is protected by copyright laws other than syndication rights. Investorideas is a news source on Google news and Linkedintoday plus hundreds of syndication partners. Our site does not make recommendations for purchases or sale of stocks or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated by featured companies, news submissions, content marketing and online advertising. Contact each company directly for press release questions. Disclosure is posted on each release if required but otherwise the news was not compensated for and is published for the sole interest of our readers. More disclaimer info: http://www.investorideas.com/About/Disclaimer.asp

BC Residents and Investor Disclaimer : Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: http://www.bcsc.bc.ca/release.aspx?id=6894. Global investors must adhere to regulations of each country.



Free News Alerts
Email:  

Read more News





TOP

Investor Ideas © 2000 - 2014 InvestorIdeas.com®, ECON

Free Investor Stock Alerts
Sign up here

login | logout | about us | contact | disclaimer / disclosure |
advertise | company profile directory | partners / links |
job search | privacy policy | trade | services | sitemap |