The Key to Maximizing After-Tax Cash Flow

Structuring your business is often the key to maximizing after-tax cash flow. Business owners should think both current and future cash flow when setting up a business structure. Always consider the “Exit Strategy”. What does a buyer want to buy? Typically, buyers look to purchase assets because of beneficial tax benefits of depreciation and amortization of assets. Sellers typically look to sell stock because of the capital gains rates applicable to stock sales and a single level of taxation. Typically pass-through entities such as “S” corporations, partnerships or LLCs have met the needs of both buyers and sellers. With tax rates projected to go up due to federal deficit spending, a pass-through entity could actually decrease current cash flow to business owners for future years. Are we headed for a paradigm shift? Too early to tell really. However, 2010 may be the best year ever to sell your business if tax rates rise! Let us help you with a complimentary consultation. Contact one of our professionals today!

By W.A. Robinson III – CPA
Business Intermediary
The Crown Business Group LLC