Earnouts: Structuring, Types of Arrangements, Strategies, Taxation

BarbriSFCourseDetails

Course Details

Course Information

smart_display Format
On-Demand
signal_cellular_alt Difficulty Level
Intermediate
work Practice Area
Tax Preparer

Date & Time

event Date
Friday, November 15, 2024
schedule Time
1:00 p.m. ET./10:00 a.m. PT
timer Program Length
110 minutes

Credit Information

BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00

This webinar will explore taxing and structuring earnout agreements. Our knowledgeable panel of exit planning professionals will review types of earnouts, the tax implications of these arrangements from the buyer's and seller's perspectives, and case studies of typical earnout agreements.

Faculty

Walter H. Deyhle

Partner

GRF CPAs & Advisors

Mr. Deyhle provides tax preparation and planning, business valuation, forensic analysis and exit planning consulting to the firm’s clients including individuals, government contractors, international financial holding companies, wholesale distribution companies, retail stores, professional practices, consulting firms and partnerships owning real property. He and his team are skilled at addressing particularly complex tax issues with clients concerning investments, estate and gift taxes as well as consulting for mergers, acquisitions, liquidations and reorganizations, divorce settlements and litigation, public offerings and buy-sell agreements. A senior tax partner and former director of the firm’s tax division, Mr. Deyhle provides in-house computerized preparation of individual, corporate, partnership, estate and trust, and nonprofit tax filings. He holds the designation of Accredited in Business Valuation (ABV) by the AICPA, as well as the CExP™ designation from the Business Enterprise Institute and the Certified Exit Planning Advisor designation by the Exit Planning Institute. Mr. Deyhle was recognized again in 2022 by Washingtonian as one of Washington, DC’s Best Financial Advisors (for tax services).

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio

Scott W. Taylor

Principal

Ruttenberg Dickerson

Mr. Taylor is a principal with the firm. He is a member of the Virginia State Bar and is admitted to the United States Tax Court and the United States Court of Appeals for the Fourth Circuit. Mr. Taylor earned his Juris Doctor Cum Laude from the George Mason University School of Law in 2001 and a Bachelor of Science Degree (Business) from Virginia Tech in 1992. He is a member of the Fairfax Bar Association and served as the Vice Chair (2006-2007) and Chair (2005-2006) of the Business Law and Corporate Counsel Section. Mr. Taylor is also a member of the American Bar Association and is a member of the Fairfax Chamber of Commerce. His practice areas include mergers and acquisitions; transactional planning and structuring; business succession and exit planning; general corporate and business law; real estate; and tax-exempt organizations.

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio

Description

Earnouts facilitate business sales and mergers by bridging perceived differences in the value of the target business. The seller often must earn the remainder of the price by meeting specified financial thresholds based on EBITDA, gross margins, or other criteria.

A chief concern of earnouts is their tax implications. Earnout agreements can include compensation arrangements or the payouts may be considered part of the original purchase price. A seller might want these payments included in the purchase price and taxed at capital gains rates, while the buyer prefers compensation treatment and a subsequent tax deduction. Structuring earnouts appropriately to minimize taxation is critical. Tax practitioners working with businesses must master the tax implications of earnout contracts.

Listen as our panel of merger and acquisition experts delves into the tax treatment of earnout arrangements for business owners and their advisers.

Outline

Introduction to earnouts
Types of earnouts
Earnout agreements
Tax considerations
Case studies

Benefits

The panel will cover these and other critical issues:

Types of earnout arrangements
The purpose and benefits of earnouts in business transactions
Common performance metrics and targets
Structuring earnouts to minimize tax liabilities

NASBA Details

Learning Objectives

After completing this course, you will be able to:

Identify ways to minimize tax liabilities when structuring earnouts
Determine how compensation-based earnouts are taxed
Decide when an earnout agreement could facilitate a sale
Ascertain different types of performance indicators incorporated in earnout arrangements

Field of Study: Taxes
Level of Knowledge: Intermediate
Advance Preparation: None
Teaching Method: Seminar/Lecture
Delivery Method: Group-Internet (via computer)
Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.