This document discusses trends in mergers and acquisitions (M&A) and exit planning for 2021. It first covers the impact of 2020 tax changes and provides an outlook for 2021. It then reviews M&A market trends in 2020, finding a 20% decline in deal activity and falling price multiples. The document also outlines the exit planning process and benefits of planning. It poses poll questions to business owners on their long-term goals, timelines, and definitions of wealth. The presentation encourages owners to assess their readiness by taking complimentary assessments.
The Long Lasting Impact of Tax Reform- NYC- Event- 1/24/18Citrin Cooperman
The passage of the Tax Cuts and Jobs Act will have widespread and long lasting implications throughout the country and will change how most taxpayers will prepare their tax returns. Citrin Cooperman recently hosted a seminar in NYC to provide insight on where we are now, how we plan to move forward, and how the new law will impact your overall business and tax strategies.
The passage of the Tax Cuts and Jobs Act will have widespread and long lasting implications throughout the country and will change how most taxpayers will prepare their tax returns. Citrin Cooperman recently hosted a seminar in Philadelphia to provide insight on where we are now, how we plan to move forward, and how the new law will impact your overall business and tax strategies. Join us to get answers to questions in the following areas:
Corporate and Businesses
Pass-Through Entities
International Issues
Individuals
C-Suite Snacks Webinar Series: There’s No Vaccine for This - State and Local ...Citrin Cooperman
Sign up for our weekly C-Suite Snacks webinars here: https://www.citrincooperman.com/infocus/c-suite-snacks
Our C-Suite Snacks webinar series provides the middle market with brief, strategic, and tactical business improvement information for 30 minutes every week. Join Citrin Cooperman live every Thursday at noon for snack-sized insights for business executives.
The pandemic has affected everything in our lives, all the way down to how we run our businesses and our personal finances. In this session, State and Local Tax Partner Eugene Ruvere covered business and personal income tax considerations connected to the pandemic.
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During this webinar we focused on the interplay between the different CARES Act provisions, in particular PPP loans, Provider Relief Funds, and Medicare Advanced Payments, and how they may impact 2020 year-end planning and 2021 forecasting.
High Net Worth Webinar Series: SALT Thoughts - Pass-Through Entity Taxes & Re...Citrin Cooperman
During this webinar, we discussed how to potentially mitigate the impact of the state and local tax (SALT) cap at the federal level. New York State has joined the list of states that have enacted an elective pass-through entity tax in an effort to do just that. We also dove into the possibility of changing residency to a low-tax or no-tax state. With state tax rates on the rise in some places and the realization that remote work is doable, many individuals are contemplating making a move. To succeed in making a change like this, one must be aware of the technical rules and be willing to significantly adjust one’s life. We talked through all these considerations.
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The passage of the Tax Cuts and Jobs Act will have widespread and long lasting implications throughout the country and will change how most taxpayers will prepare their tax returns. Citrin Cooperman recently hosted a seminar in NYC to provide insight on where we are now, how we plan to move forward, and how the new law will impact your overall business and tax strategies.
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Sign up for our weekly C-Suite Snacks webinars here: https://www.citrincooperman.com/infocus/c-suite-snacks
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CARES Act Update - What you Need to Know Heading into 2021Citrin Cooperman
During this webinar we focused on the interplay between the different CARES Act provisions, in particular PPP loans, Provider Relief Funds, and Medicare Advanced Payments, and how they may impact 2020 year-end planning and 2021 forecasting.
High Net Worth Webinar Series: SALT Thoughts - Pass-Through Entity Taxes & Re...Citrin Cooperman
During this webinar, we discussed how to potentially mitigate the impact of the state and local tax (SALT) cap at the federal level. New York State has joined the list of states that have enacted an elective pass-through entity tax in an effort to do just that. We also dove into the possibility of changing residency to a low-tax or no-tax state. With state tax rates on the rise in some places and the realization that remote work is doable, many individuals are contemplating making a move. To succeed in making a change like this, one must be aware of the technical rules and be willing to significantly adjust one’s life. We talked through all these considerations.
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As 2021 comes to an end, business owners and individuals are seeking opportunities to maximize their savings through year-end tax planning. This webinar session will help you navigate the many complexities, obstacles, and impending tax landscape changes that the 2021 tax year brings to the table and what 2022 has in store.
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Topics included:
- What private companies should think about for 2022
- How the lease accounting standards can impact your financial
statements, financial covenants, and taxes
- Identifying opportunities for your business due to the new lease
accounting standards
In this webinar, CARES Act Funding and Single Audit Update, Withum’s Devin Desmond and Jennifer Stewart discuss recent developments related to Coronavirus Aid, Relief and Economic Security (CARES) Act funding in addition to revisions to Uniform Guidance and Single Audit implications. Viewers are able to identify recent developments related to CARES Act funding and better understand revisions to Uniform Guidance and impact on Single Audits.
Presenters:
• Chuck Miller, CEO, NgenX Energy
• Martin Harski, Cost Segregation Principal, National Tax Service Group, Withum
• Cary Milstein, Early Entrepreneur, Medical Cannabis Sector
High Net Worth Webinar Series - Estate Planning Strategies and UpdatesCitrin Cooperman
There’s much uncertainty in the world of estate planning for high net worth individuals and their families. With numerous legislative proposals that would drastically alter the current estate planning landscape, listen in as our Trust and Estate Services Practice team discusses: various proposals, including those in Congress and the Biden Administration’s Green Book, estate and gift planning strategies for the remainder of tax year 2021, and more.
After a year of uncertainty and economic disruption, the restaurant industry has won federal relief. On March 11 President Biden signed the American Rescue Plan into law which includes a $28.6 billion Restaurant Revitalization Fund (RRF) to assist struggling restaurants during the pandemic. The RRF impacts restaurant owners with 20 or fewer locations and will be administered by the Small Business Administration.
Topics for discussion:
- Who is eligible for RRF?
- How can the fund be used?
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2020 Year-End Tax Planning for Law Firms and AttorneysWithum
Tax planning can be a difficult strategic process; this tax planning season is further complicated by the COVID-19 pandemic as well as the uncertainties surrounding the Presidential Election. This session will shed light on a number of significant considerations regarding NJ BAIT, nexus issues related to remote working, and PPP loan forgiveness as it relates to general high net worth planning.
Get the very latest on important tax law changes that will impact returns for Tax Year 2013. There are so many changes to keep track of each year. Let us us do the legwork and keep you up to speed on the current status of tax law changes and extenders. Topics will include the Defense of Marriage Act, Post 2013 Affordable Care Act changes and other IRS initiatives.
PPP Loan Forgiveness and Tax Considerations For the Construction IndustryWithum
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2021 Year End Tax Planning for Law Firms and AttorneysWithum
2021 has ushered in a return to what we can consider our new normal for the foreseeable future. The impact of COVID-19 on law firms persists in the form of hybrid work environments as managing partners are tasked with creating return-to-work policies with flexible remote work options.
With remote work comes complicated nexus implications that law firms must navigate. Meanwhile, federal and state tax laws, particularly Pass-Through Entity Taxes (PTET), continue to impact law firms in a unique way.
High Net Worth Webinar Series - Tax Planning and Update for 2022Citrin Cooperman
As 2021 comes to an end, business owners and individuals are seeking opportunities to maximize their savings through year-end tax planning. This webinar session will help you navigate the many complexities, obstacles, and impending tax landscape changes that the 2021 tax year brings to the table and what 2022 has in store.
Lease Accounting: Preparing Your Business for 2022Citrin Cooperman
Making a smooth transition to the new lease accounting standards and putting new practices in place for the future is a top priority for any business as they plan for 2022. During this webinar session, we reviewed how you can handle and prepare to navigate your business through the new lease accounting standards.
Topics included:
- What private companies should think about for 2022
- How the lease accounting standards can impact your financial
statements, financial covenants, and taxes
- Identifying opportunities for your business due to the new lease
accounting standards
In this webinar, CARES Act Funding and Single Audit Update, Withum’s Devin Desmond and Jennifer Stewart discuss recent developments related to Coronavirus Aid, Relief and Economic Security (CARES) Act funding in addition to revisions to Uniform Guidance and Single Audit implications. Viewers are able to identify recent developments related to CARES Act funding and better understand revisions to Uniform Guidance and impact on Single Audits.
Presenters:
• Chuck Miller, CEO, NgenX Energy
• Martin Harski, Cost Segregation Principal, National Tax Service Group, Withum
• Cary Milstein, Early Entrepreneur, Medical Cannabis Sector
High Net Worth Webinar Series - Estate Planning Strategies and UpdatesCitrin Cooperman
There’s much uncertainty in the world of estate planning for high net worth individuals and their families. With numerous legislative proposals that would drastically alter the current estate planning landscape, listen in as our Trust and Estate Services Practice team discusses: various proposals, including those in Congress and the Biden Administration’s Green Book, estate and gift planning strategies for the remainder of tax year 2021, and more.
After a year of uncertainty and economic disruption, the restaurant industry has won federal relief. On March 11 President Biden signed the American Rescue Plan into law which includes a $28.6 billion Restaurant Revitalization Fund (RRF) to assist struggling restaurants during the pandemic. The RRF impacts restaurant owners with 20 or fewer locations and will be administered by the Small Business Administration.
Topics for discussion:
- Who is eligible for RRF?
- How can the fund be used?
- Next steps and important considerations for restaurant owners
2020 Year-End Tax Planning for Law Firms and AttorneysWithum
Tax planning can be a difficult strategic process; this tax planning season is further complicated by the COVID-19 pandemic as well as the uncertainties surrounding the Presidential Election. This session will shed light on a number of significant considerations regarding NJ BAIT, nexus issues related to remote working, and PPP loan forgiveness as it relates to general high net worth planning.
Get the very latest on important tax law changes that will impact returns for Tax Year 2013. There are so many changes to keep track of each year. Let us us do the legwork and keep you up to speed on the current status of tax law changes and extenders. Topics will include the Defense of Marriage Act, Post 2013 Affordable Care Act changes and other IRS initiatives.
PPP Loan Forgiveness and Tax Considerations For the Construction IndustryWithum
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2021 Year End Tax Planning for Law Firms and AttorneysWithum
2021 has ushered in a return to what we can consider our new normal for the foreseeable future. The impact of COVID-19 on law firms persists in the form of hybrid work environments as managing partners are tasked with creating return-to-work policies with flexible remote work options.
With remote work comes complicated nexus implications that law firms must navigate. Meanwhile, federal and state tax laws, particularly Pass-Through Entity Taxes (PTET), continue to impact law firms in a unique way.
Strategic and proactive tax planning is key to saving taxes. The recent US Tax Reform signed into law by Trump creates new opportunities (and preserves some of the old) to plan and maneuver the tax code.
Intuit Presents Tax Law Changes for Tax Year 2012intuitaccts
Get the very latest on important tax law changes that will impact returns for Tax Year 2012 from Intuit's Mike D'Avolio. These changes seem to come later and later each year. Let’s us do the legwork and keep you up to speed on current status of tax law changes and extensions.
2021 Tax Savings Ideas for Individuals and Businesses.
This presentation and these materials are designed to provide information in regard to the subject matter
covered. This presentation and these materials are provided solely as a teaching tool, with the
understanding that Stephen Moskowitz, Moskowitz LLP, and the instructor are not engaged in rendering
legal, accounting, or other professional service and that they are not offering such advice in this
presentation and these accompanying materials.
This presentation discusses the American Taxpayer Relief Act of 2012, better known as the “fiscal cliff” legislation, extended many key tax provisions from the Bush era for both individuals and businesses. Also addressed were the key tax provisions contained in this Act as well as a number of other tax planning issues that you should be aware of this year.
This presentation was part of a CPE webinar. Full details at http://www.macpas.com/webinar-recap-2013-tax-update/.
More info at www.macpas.com
The election is over - now what? We recently held free tax planning and preparation seminars discussing the tax consequences of the 2012 election.
The seminar featured Steven Hartstein, CPA, JD - Partner, and Jenna Staton, EA - Manager, and covered several topics including:
•Year end tax planning for individuals and businesses
•Year end tax planning using the estate and gift tax laws for 2012
•2013 tax law if no changes are made
•What the future holds based upon post-election Congress
If you have questions, please feel free to contact our Tax Planning & Preparation Group at 440-449-6800.
Our straight talking presenters cut through the complexity to deliver relevant Tax and Superannuation insights contained in the 2018 Federal Budget. In addition, our presenters recap on the Pre Financial Year End initiatives that can be considered during the tax planning season.
Insero & Co. CPAs presents an overview of New York State and U.S. Tax reform, the economy and current trends, and what they mean for you. Whether you represent a large corporation or a small business, this update will help you get up to speed on current rules and regulations and plan for changes that may be on the horizon.
Thanks to Ulster Savings Bank for hosting this event, guest speaker Jonathan Gudema of Planned Giving Advisors and to all of our participants for joining us to learn more about the impact of the new tax law on charitable giving.
Tax Cuts and Jobs Act: Individual Tax Planning InsightRea & Associates
The new Tax Cuts and Jobs Act managed to pack in a lot of changes for individual filers, many of which have left more than a few of us scratching our heads. This webinar will dive into the provisions that will have the most impact on individual tax strategy, including changes associates with trusts and estates. Cindy Kula, CPA, PFS, CFP, and Inez Bowie, CPA, CSEP, have already spent countless hours combing through the legislation and additional guidance so you don’t have to. Join us for this session to find out what they found.
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6. Owners Are 16% More Likely To Sell to 3rd Party
Q. Which of the following best describes your long-term goal for your business? I plan to:
N= 9,765
48%
2%
17%
28%
6%
56%
2%
12%
23%
7%
Sell my business to a third
party.
Shut down my business. Transition my business to my
kids.
Transition my business to the
next generation of managers.
Other
Pre-COVID During COVID
Source: Value Builder System, 2020
7. 17% Drop in Time Horizon
Most Owners Plan to Sell Within 5 Years
N= 9,765
Q: How many years do you plan to continue operating your business?
33%
49%
39%
41%
2-5 years >10 years
Pre-COVID During COVID
Source: Value Builder System, 2020
8. Business Owners Definition of “Wealth” Has Changed
N= 9,765
Q: Which of the following best describes your definition of someone who is wealthy?
20%
38%
42%
15%
38%
47%
An individual with at least $10 million in
investable assets.
Having enough money saved up to cover your
monthly lifestyle expenses for the rest of your
life.
Having enough money to do whatever you
want, whenever you want.
Pre-COVID During COVID
Source: Value Builder System, 2020
9. Tax Changes and Outlook
Impact on Future Deals
9
Mary Richter, Shareholder
mrichter@schneiderdowns.com
10. RECAP- COVID-19 Legislation
Families First Coronavirus Response Act
• Wages paid 4/1/20-12/31/20
• Businesses with < 500 employees
• Paid sick leave and expanded FMLA
• Related payroll tax credits
• Up to $511 per day/$5,110 total per employee for sick leave
• Two-thirds of wages up to $200 per day $2,000 for FMLA
CARES Act
• $2.2 trillion
• Individual & Business tax relief
• Payroll tax deferral
Loans - PPP, EIDL, Main Street Lending
State and Foreign Legislation
11. Payroll Protection Program Loans
• Provides small businesses with funds to pay up to eight weeks of payroll costs, including
benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.
• Up to $10 million; Loan forgiveness available
• Up to $2 million in PPP2, additional rules (300 employee max, more expenses)
• Not taxable, expenses deductible for federal purposes
» Impact on other tax deductions and credits (199A, R&D)
» Consider which costs are included to be forgiven
» State conformity?
Impact on Financial Statements
» Shown as debt while outstanding
» Forgiveness is included in income
» Impact on debt covenants
12. Employee Retention Credit
Credit for 50% of wages paid 3/12/20-1/1/20. $5,000 max credit per employee
• Full or partial shutdown pursuant to a government order or 50% reduction in gross receipts
in a quarter
• if < 100 employees, applies whether or not services were provided by employees
• If > 100 employees, only for wages paid to employees who could not perform duties
• Eligibility period extends until get to 80% of prior-year quarter receipts
• Include health plan expenses for furloughed workers
Credit for wages paid 1/1-6/30/21
• up to 70% of wages, max $7k per quarter
• less than 80% of 2019 same quarter revenues
• 500 employee threshold for ANY payroll
CAN TAKE IF RECEIVED PPP, but not on same wages
• Cannot stack benefits for same wages as other credits
13. Other Items to Consider
• Business Interest Deduction Limitation
• Increased to 50% of adjusted taxable income for 2020
• Rules modified to include all depreciation expense in EBITDA and exclude debt issuance
costs and commitment fees from interest
• Proposed regulations for debt financed distributions
• Election to use 2019 ATI for 2020 limitation
• Impact of debt modifications? Taxable income, exclusions available
• Increased charitable contribution limits for 2020
• Employee Disaster Relief Payments - nontaxable to employee
• Excess Business Loss rules repealed for prior years, suspended for 2020-2025
• NOLs generated in tax years 2018-2020 can be carried back five years
• Elect to forgo NOL carryback (with 2020 return)
14. The Biden Administration Tax Plan
14
REPEAL TCJA COMPONENTS FOR
HIGH-INCOME FILERS AND RETURN
THE TOP TAX RATE TO 39.6%
INCREASE THE
CHILD TAX CREDIT
AND DEPENDENT
CARE CREDIT
IMPOSE 12.4%
SOCIAL SECURITY
TAX ON INCOME
OVER $400K
PENALTIES FOR
MOVING JOBS
OVERSEAS
ELIMINATE
SECTION 1031
GAIN DEFERRAL
FOR REAL ESTATE
TRANSACTIONS
INCREASE
CORPORATE TAX
RATE FROM 21% TO
28% AND ESTABLISH
A MINIMUM TAX FOR
BOOK INCOME OVER
$100M
50% REDUCTION IN
ESTATE TAX
EXEMPTION,
ROLLBACK LIFETIME
GIFT EXEMPTION,
AND ELIMINATION
OF BASIS STEP-UP
JOE BIDEN
TAX POLICY PROPOSALS
15. Impact on M&A Deals
• Due Diligence for COVID Credits, PPP loan
• PPP Loan – escrow if forgiveness has not been finalized
• Negotiate benefit for NOL carryback potential (through 2020)
• COVID impact on valuation?
Potential changes
• Potential for higher tax rates
• Potential for higher cap gains tax rates
• Reduction of gift and estate tax exclusion
• No basis step up from estate
21. How ready are you?
YOUR
BUSINESS
YOU,
PERSONALLY
Take the next step. Get your complimentary readiness assessments.
Laurie Barkman Certified Value BuilderTM Advisor, lbarkman@smalldotbig.com
Editor's Notes
Vast majority motivated by independence. Not to build the next google but to be in charge of their business.
Vast majority motivated by independence. Not to build the next google but to be in charge of their business.
Vast majority motivated by independence. Not to build the next google but to be in charge of their business.
Our second driver of a happy and lucrative exit is called "Structuring Flexibility” which describes an owner’s willingness to consider multiple exit scenarios. A lot of founders make the mistake of approaching their exit with a rigid vision of how they see their exit. They imagine an acquirer writing them an outlandish check in exchange for the keys which the owner hands them as they ride off into the sunset.
As we know, this is virtually never the case. Most founders will have to stay on to help a new owner transition into their business. The more flexible an owner is as they approach their exit — keeping all of their options open — the more buyers will be interested in exploring a deal. More buyers at the table means more competition which in turn leads to higher valuations and better deal terms for the founder which is why being flexible about how a deal is structured leads to better exits.