R&D Tax Credits impact on biz valuation

by a searcher from Gustavus Adolphus College

Jun 09,2022

Does anyone have resources, insight or experience with R&D Tax Credits and the impact on business valuation?

Seller (manufacturer)  includes the credits as an increase in SDE.  Obv not an EBITDA add back but dollars do flow.  

any help greatly appreciated.

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searcher from Western Michigan University

I have seen some questionable adbacks over the years. Tax credits would probably fall into that category as well. There is no guarantee that the rules won't change or that the business will continue to receive them. You also need to factor in the risk you are taking on because of the increased chance of being audited.

06/14/2022 | like reply | 0 likes

professional from The University of Texas at Austin - Red McCombs School of Business

I have some friends that specialize in R&D tax credits for manufactures. There are changes to the tax laws on that can limit the value & may impact how you value the company. Want an introduction?

06/14/2022 | like reply | 0 likes

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