Buying a tax practice.

Tziril Miriam

Fri, Jun 12 2015, 1:24 pm

I’ve never been on Imamother, I’m borrowing my aunt’s account with her permission.

My uncle is a CPA, and has a tax business downtown. He’s been at capacity for years, and he only does complex individual returns. He will retire in 5 years, and he would like me to take over the practice. I could start working with him immediately, doing corporate and estate work.

I now work at a CPA firm, and have very little flexibility. I’m starting a family soon, and want to own my uncle’s business. I know that the only way I could run it would be to hire staff. (Passover is during tax season). And I have lots of ideas to expand into different practice areas.

I keep hearing that the usual cost of buying an accounting practice is the amount its gross income, with adjustments up or down for various circumstances. This is a solid business, and I want to be fair to my aunt and uncle. They will need payment, whether cash or an annuity and/or market-rate rent. The commercial property taxes and expenses are very high.

I would appreciate any ideas or concerns.

Amarante

Fri, Jun 12 2015, 5:56 pm

My advice would be to hire a disinterested third party appraiser who has experience in valuing tax practices. Both parties want to be fair but you don't want ANY possible hard feelings to arise after the transaction. Either each party can hire their own or the parties could agree on a neutral third party expert.

I would also have each side hire attorneys who are experienced in this area. Again, not because you and your uncle don't trust each other but because you want to make that there is NO possible in the future of anything coming up that should have been dealt with during the sale.

Again, not because you distrust him, but because you want to make sure that your family's good feelings remain intact, I would have agreements in place before you start working for him which spell out exactly what the relationship will be etc.

MagentaYenta

Fri, Jun 12 2015, 6:03 pm

There are professionals that evaluate businesses, most often they are used in divorce cases, but also for sales. I'd call a respected divorce atny and explain that you would like a referral to a few evaluators.