M&A Nugget: Tax Cuts and Jobs Act – The Dark Side
My December 27 nugget discussed changes made to the tax laws by the Tax Cuts and Jobs Act (“Act”) that could have a substantial benefit for sellers and buyers of businesses. However, not every provision of the Act is rosy for buyers of businesses. For example, the Act limits business interest that can be deducted. That means that not all interest paid on financing used to fund an acquisition may be able to be deducted from income. Also, the net operating loss rules have changed. The net operating loss deduction is now limited to 80% of taxable income and net operating losses can no longer be carried back to prior years. Although acquisitions are not often driven primarily by tax motivations, it is important to understand how the changes made by the Act will affect the taxes an acquirer will pay going forward.
If you have any questions about this or any other M&A issue,
please contact Glenn Solomon at email@example.com or 443-738-1522.
ABOUT GLENN D. SOLOMON
firstname.lastname@example.org | 443-738-1522
Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.
ABOUT OFFIT KURMAN
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.
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