World Class Mergers & Acquisitions  |  For Companies $5 Million to $100 Million in Revenue

Mergers & Acquisition FAQ – April 2012

Q: What is the capital gains tax rate for stocks that I sell in 2012?

A: If the stock was held for less than one year, the capital gains rate is generally the same rate as the taxpayer’s ordinary rate.  On the other hand if the stock has been held for one year or longer, the capital gains rate is 15%.  Usually it is better to hold gain stocks longer than one year in order to get a beneficial tax rate.

Q: My business has operated at a loss for the past 3 years according to the tax return.  How can I get a mortgage?

A: The answer to this is not necessarily easy and cannot be completely answered within a paragraph.  Generally, if a person has had negative income for each of the past three years, obtaining loans tends to become hard, but not impossible.  It would be wise to have the tax returns examined by an accountant or professional and see why the person had negative income.  Sometimes, the financial statements can be restated and shown to cast a more accurate and better picture regarding credit.

Q: I operate a small business. At what point should I turn to professionals to do my accounting / taxes?

A: Usually it depends on the nature of the business, but once revenues hit $5000, it is not a bad idea to turn to professional tax preparation.  Further, if any business operates above $40,000 in revenues or 1099 earnings, they should absolutely be under the due care of a professional.

By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors