Mergers and Acquisition costs can be large, diverse and complicated. How they are treated for tax purposes is just as complex. We can help simplify the process and make sure you get it right.
The treatment of expenditures incurred in a business acquisition or disposition is challenging. Some of these costs must be expensed, others capitalized — and there is often a significant amount of “gray area” in between.
Opportunity: The general rule under these regulations is to capitalize all of the costs that facilitate a transaction. In certain covered transactions, costs that are incurred in investigating or otherwise pursuing the transaction are not deemed to be facilitative and can be either immediately deductible or amortizable over 15 years.
Implementation: New regulations have heightened the documentation requirements regarding the deductibility of certain fees. We employ a comprehensive work plan to analyze the timing and nature of costs incurred in an acquisition or disposition. Our transaction cost analysis deliverable includes:
Result: A supporting and cross-referenced documentation binder that includes copies of all material considered as well as analysis leading to the conclusion as to the deductibility or expense of certain costs. This provides you the defense you need if questioned on these controversial items by the IRS.
Nestled in the heart of the Twin Cities on Lake Calhoun, ThreeFive has fostered a work environment to attract key talent that is second to none in addressing corporate tax benefit opportunities for its clients.