Purchase Price Allocations
When assets are acquired in the purchase of a business, the actual allocation of the purchase price to the underlying assets is governed by the IRC Code §1060. The code makes pre-acquisition valuations for federal tax purposes useful for buyers and sellers in conducting negotiations, transactions structuring and obtaining financing.
Building on its expertise in valuing businesses, Frazier Capital assists companies in both pre-acquisition and post-transaction valuations for purchase cost allocation purposes. A typical allocation engagement would involve our real estate specialists appraising an acquired business’ plant, property, and equipment according to their tax-life categories. This would be accompanied by our financial analysts valuing the business’ overall operations on the basis of its earnings as well as valuing any identified intangibles, including intellectual property.
In addition to enabling taxpayers to comply with IRC Code §1060, our services are useful when businesses are acquired through the purchase of stock under the section 338 (h)(10) election, where the transaction is treated as an asset purchase for tax purposes. In either situation, Frazier Capital’s valuations for purchase price allocations withstand IRS scrutiny and review.
State and Local Property Taxes
Frazier Capital Valuation provides services ranging from preliminary opinions, in order to identify whether there is a potential for a significant tax reduction, to detailed valuations.
Estate and Gift Taxes
The transfer of a closely held business entity requires the consideration of estate and gift tax issues. Frazier Capital Valuation has significant experience in determining appropriate minority and marketability discounts for partial equity interests, insuring the accurate valuation of the interests for tax filing purposes.