I am trying to create a few sample financial models to get some general estimates around the return, debt pay-off time, etc. based on the different deal sizes, EBITDA multiples, and deal structures. I am struggling to calculate the free cash flow due to confusion around depreciates and/or amortization tax deductions for the acquisition cost (purchase price + closing cost). So, I have the following questions:
1. Asset Purchase - assuming that the real estate will be leased, can all of the acquisition cost (purchase price + closing cost) be depreciated and/or amortized over the period of 10 years (or 15 years) when you do asset purchase? Is there anything that you need to pay for during acquisition, but can't be depreciated or amortized?
2. Stock Purchase - How the depreciation and amortization work when you do stock purchase?
How the business acquisition cost can be amortized and/or depreciated?
by a searcher from University of Cincinnati - Carl H. Lindner College of Business
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Stock Purchase, you are taking over the Sellers dep schedule but your basis is the selling price.