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... prefer to have the buyer or the agency take over future liabilities, such as errors & omissions claims, and get him off the hook. The Clinton 1993 tax changes (93 OBRA) have changed the cost/benefit calculations on sales. They make some formerly non- deductible items (such as good will) depreciable over a 15 year period, but also extend the amortization period of covenants not to compete to 15 years. They also raise individuals' maximum federal rates on ordinary income (39.6%) substantially above the ... the other employees as well as the owner, but which add to the agency's overhead. He may establish a non qualified and unfunded deferred compensation plan, which depends on having someone available to continue running the agency after retirement. He may set up an Employee Stock Ownership Plan or ESOP, under which he sells out to the agency's employees, possibly using a tax deferred rollover into other securities. He may merge with a large brokerage, possibly staying on for a time as an employee. The most typical transfer methods for an ... from earnings of the business, with as little down as possible. He typically wants to be able to depreciate as many of the assets he acquires over as short a time as possible, to reduce the tax cost of the acquisition. He also wants to avoid liabilities of the acquired business, such as errors & omissions exposure. The seller may wish to defer tax from the sale. He normally wants as much of a down payment as possible. He typically would prefer to have capital gains treatment for the gain from the ...

...s on sales. They make some formerly non- deductible items (such as good will) ...he acquirer suffers dilution of the ownership interest of its shareholders. Th...