Allocation of Considerations Process
You will receive a step by step review of a proposed deal to give all parties a systematic approach to report values on their Form 8594’s. Each Step consists of a spreadsheet that details the details involved. They are presented in the following order:
- An Introduction
- The Seller’s Balance Sheet of Acquired Assets with Initial Basis, Depreciation, and Current Fair Market Values (required input)
- An Outline of the Terms of the Deal (required input)
- Calculation of the Seller’s Consideration – requires estimations of any Seller transaction costs
- The Allocation of the Seller’s Consideration to the 7 Classes found on Form 8594, which may need to be adjusted for final costs
- A calculation of the Seller’s income tax implications for this deal scenario using maximum tax rates. This is NOT the Seller’s actual tax liability but an indicator of the scenario’s tax implications.
- Calculation of the Buyer’s Consideration – requires estimations of any Buyer transaction costs
- The Allocation of the Buyer’s Consideration to the 7 Classes, which may need to be adjusted for final costs
- The Buyer’s Balance Sheet at closing as a result of that Allocatio
Additional Assistance commonly requested but not a part of this engagement
The Seller may wish an actual calculation of their net after income tax proceeds of a sale, often to compare two different proposed deal terms. Calculating the actual tax liability requires more information than requested for this process.
The Buyer may wish certified valuations of asset Fair Market Values, not only for the 8584 but also as a part of of Due Diligence and obtaining financing.
Referrals to experienced professionals in M&A transaction assistance are available upon request for additional assistance like this.