World Class Mergers & Acquisitions  |  For Companies $5 Million to $250 Million in Revenue

Mergers & Acquisition FAQ – August 2011

Q: I am planning on buying a large piece of equipment, is there anyway I could deduct the cost of this equipment rapidly?

A: Yes.  If the equipment is new, “bonus” depreciation can be taken against the asset.  Additionally, regardless of whether the asset is brand new or not, section 179 depreciation also applies which generally allows a business to deduct up to $500,000 worth of depreciable expenses in 2011.  The same rule applied in 2010.

Q: I am interested in having my business valued for a number of reasons.  Is a valuation done for estate planning purposes effective for other purposes such as financing as well?

A: Generally, you would want to have your valuation reviewed or updated to reflect accurate value to a bank or when using the valuation for other purposes.

Q: I am selling my house.  Does the primary residence exclusion still apply?

A: Absolutely.  Under section 121 of the Internal Revenue Code home sellers can exclude up to $250,000 individually or up to $500,000 jointly on their tax returns.

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