Legal Blog

M & A Nuggets: President-Elect Trump’s Tax Proposals


white-houseAlthough the business terms of a merger transaction are usually not driven primarily by tax consequences, the purchaser and seller do consider tax consequences in arriving at the business terms.  With that in mind, certain of President-elect Trump’s tax proposals, if enacted, could impact the bottom line in merger transactions.  One of President-elect Trump’s proposals is to reduce the individual income tax to three brackets with the following rates – 12%, 25% and 33%.  If you are selling your business, then depending on your current tax rate, the tax rate cuts, if enacted, may affect your after tax return from the sale.  On the purchaser’s side, President-elect Trump has proposed to in large part do away with depreciation of assets over time and allow immediate tax write-offs of the costs of acquired assets.  This proposal, if enacted, could substantially increase after tax net cash flow of the purchaser in the first year after the purchase.  There are other Trump tax proposals that could affect your transaction. Although it remains to be seen if and when the Trump tax proposals will be enacted, it would be prudent to keep abreast of them as you negotiate the purchase or sale of a business.


Glenn D. Solomon Esq., is a principal at the law firm of Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years, with extensive experience in the purchase and sale of businessesstructuring ownership agreements, and advising companies in financial distress.







Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 130 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our ten offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.


You can connect with Offit Kurman via our BlogFacebookTwitterGoogle+YouTube, and LinkedIn pages.  You can also sign up to receive Law Matters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.