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...ake business decisions, from filing tax returns to selling the interest in the...Have some been structured to be income tax free (insurance payments may be)? ...

...me statements, balance sheets, and tax returns. Buyers will look at top-line ...potential buyers. THE BOTTOM LINE Preparation is essential to maximizing the...

...OP), which incorporated a number of tax incentives to encourage its use. The E...of principal and interest on the loan. Tax changes in 1997 now allow ESOPs and other tax-exempt organizations to be sharehol...

... after expiration, a company auditor will come to your office, or you will receive a request in the mail for a self-audit. The purpose is to determine the actual exposure units' upon which your final premium will be based. The following are suggestions that should lessen the possibility of being overcharged for insurances. 1. Some premiums are based on annual sales or receipts. Be sure the sales tax that you remit separately is not included in the gross sales figure. Also remember that the intercompany sales (involving subsidiaries and parent companies) are excluded. 2. If your General Liability premium is based on payroll, it is possible that you may omit your truck drivers' wages. Discuss this with the auditor, or call us if you have any questions. 3. When auditing General ... Blog Photos Group Connections Reviews IMMS Library Immerse yourself in our stacks. Take some time and browse through our library. We have thousands of articles, checklists, tip sheets, sales letters, and more! Communications Marketing Customer Service Planning Finance/Accounting Risk Management Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Audit Explanation - Prepare, Prepare 4/30/2013 10:38:26 PM by CompleteMarkets Editor This content has not been rated yet. AUDIT EXPLANATION - PREPARE, PREPARE Dear (Customer Name), THERE'S SOMETHING YOU SHOULD KNOW ABOUT AUDITS . . . As you know, Workers Compensation and General Liability policies are subject to an annual audit by insurance companies. Within 60 days after expiration, a company ...

...ments for any agency, valuation and tax issues, shareholder internal buy/sell ... cash flow, terms affect both risk and taxes for both sides.   Win/Win N...

... willing to finance the purchase of their interests? Does third-party financing make sense, and have you arranged for it well in advance? What financial resources does the next generation of owners have? Do you plan to use the agency's future cash flows to repurchase stock from departing shareholders? If so, have cash flow projections been prepared that validate the viability of this plan? The transfer mechanism and resulting tax consequences to buyers and sellers. As they say, The devil's in the details. Getting the price right is only half the battle. The structure of the deal must also support the objectives of the involved parties. Careful consideration must be given to the mechanics of the ownership transfer so that the tax liabilities can be minimized for both buyer and seller. A transfer of ownership can be structured in ... . Do you have a written plan in place to transfer the ownership of your agency in an orderly fashion and at a reasonable price when you decide to move on? If not, your likelihood of perpetuation success is greatly reduced. For many agency owners, their insurance agencies are their largest single asset-so it's surprising that they don't give more attention to protecting and maximizing this investment. If not properly prepared for, the transfer of ownership can be frustrating and disappointing. Unless options and objectives are evaluated well in advance (we recommend beginning perpetuation planning at least five to seven years before the actual transfer), you probably won't be able to accomplish all your desired objectives, and the departing owner(s ) will be disappointed with the results. Simply put, if you wait until the last ...

... than a year since you created your perpetuation plan, it's time for a checkup. Over the past year, the insurance industry has changed dramatically. Legislative changes now allow new players into the insurance agency business. This development increased the value of some agencies, but the value of others has declined. The new legal structures of some agencies have changed the value and consequences of selling them. New taxes are the most obvious changes that affect the agency perpetuation. Because so many things can change in the course of a year, you should review your perpetuation plan. Start by asking yourself: What parts of my plan need attention? People: Have the players in your agency changed? Do you have any promising young staff to consider? Can the individual(s ) you've chosen to develop ... first wave of acquisitions were sweetheart deals, but common sense will soon prevail, and banks will pay only what an agency is worth, regardless of their desire to enter the insurance industry. Funding: Many perpetuation plans pay attention to the details, but overlook funding for the buyout. Do your perpetuation documents include provisions for death? Disability? Retirement? The agency must provide Key Person insurance to prepare for such unexpected departures. Tax Considerations: Buyers and sellers have different tax considerations. What's good for the seller is seldom best for the buyer. Because of the new capital gains tax laws, most sellers prefer to sell their stock in the agency. Agency owners with C' corporations who are contemplating the sale of expirations should consider the current 60% tax rate on such transactions. The ...

...ales or receipts. Be sure the sales tax that you remit separately is not incl...

... as administration, accounting, and taxes. SELLER'S ADVANTAGES: Elimin...der other factors, such as accelerated tax issues, the value of cash, and pay-...

...elling the agency, the 1993 Clinton tax law changes make good will and expirat...wills or trusts that take advantage of tax saving opportunities in the death tax laws. Another device is to channel ...