Anyone have a seller-economics after-tax proceeds worksheet ?

September 04, 2019

by a searcher from Harvard University - Harvard Business School in Washington, DC, USA

I am looking for a simple model / workbook / set of notes that would help convert offers to the after-tax value for a seller under different seller, states, and offer scenarios (eg, seller notes, non-competes, earnouts, stock vs. asset deals, c-corp vs llcs, etc.). I know accountants help sellers compare offers on a post-tax basis, and I would like to do that myself confidently so I know the seller's perspective. Thank you!

Reply by a professional
from Walsh College of Accountancy and Business Administration in Detroit, MI, USA

I do these types of analysis all the time for both buyers and sellers. There is no "simple model / workbook" that does everything you are looking for. The federal and state tax law is very complex and each scenario has its own set of facts that can drive different after-tax proceeds. For this reason, each calculation is modified to match the facts. Tax reform has also added to the complexity of these types of calculations. I understand your desire to have a calculation since some sellers are motivated by after-tax proceeds vs top line sales price and it can help with negotiations. I recommend you have them work with their tax advisor to do these calculations. This way if there is a material error, the seller can look to their tax advisor and not to you as the buyer (who I presume is not trying to give tax advice).

Reply by an investor
from University of Rhode Island in Charlotte, NC, USA

Just emailed you exactly what you need.

+4 more replies.

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