Discussion:Earnout/Buyer's Side
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Discussion Forum Index --> Basic Tax Questions --> Earnout/Buyer's Side
Discussion Forum Index --> Tax Questions --> Earnout/Buyer's Side
Mtmckeecpa (talk|edits) said: | 21 December 2007 |
| My client purchased a business in 2005 and tied part of the purchase price to an earnout provision. The conditions, revenue levels, have been met and exceeded.
My understanding is the earnout amount paid by the buyer will now be amortized over the remaining life of the asset in question (apparently Goodwill) or other intangible under IRC 197. Does anyone have a different opinion regarding the treatment of an earnout payment when the existing IRC 197 assets are still being amortized? | |
| December 21, 2007 | |
| I have a similar situation, and unlike like you, am on the sell side of it. To me it's straight out sale of goodwill since all the other assets are covered. So cap gain on the seller side, and presuming then that it's 197 on the buy. | |
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