Why you should sell your transportation company sooner rather than later
Mark Borkowski of Canadian business brokerage, Mercantile Mergers & Acquisitions, based in Toronto says that if you’re in the trucking business, it’s time to get your skates on. He argues demographics, booming industry, eager buyers in the sector and low rates of CGT as good reasons to sell your business now.
The pressing argument seems to be an imminent rise in tax:
As reported in the Wall Street Journal on Nov 12 2015, Congress is planning “a 5.4% surtax on incomes above $500,000 for individuals and $1 million for joint filers” to fund health care reform, which will affect both capital gains and dividends. If passed, the surtax goes into effect Jan 1 2017, the same day the Obama tax rates of 2014 and 2015 are set to expire. The current capital gains tax rate of 15% would rise to at least 20% — 25.4% with the surtax. This represents a 69% increase overnight. This does not include any changes that might come from increases in state and local tax rates…. Why you should sell your transportation company sooner rather than later
OTOH, in his book, Valuing and Selling Your Business: A Quick Guide to Cashing In, Tim McDaniel says:
The saying “don’t let the tail wag the dog” applies to the area of taxes on M&A transactions. Taxes are a very important consideration when selling your business but don’t tle the tax issue drive your decision making process…
A sale rushed to beat the deadline may or may not be the most efficient way to go about a disposal. Take professional advice etc.