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... been made to protect it. I have had the experience of trying to arrange for the rapid sale of a deceased agent's book, and it is not a happy situation to be in if no preparations have been made. In selling the agency, the 1993 Clinton tax law changes make good will and expirations deductible to the buyer, but extend the time for amortizing covenants, expirations and good will to 15 years. Tax rate changes have raised maximum federal ordinary income tax rates to $39.6%, while leaving the maximum capital ... be decimated if an agent dies or becomes disabled and no provision has been made to protect it. I have had the experience of trying to arrange for the rapid sale of a deceased agent's book, and it is not a happy situation to be in if no preparations have been made. In selling the agency, the 1993 Clinton tax law changes make good will and expirations deductible to the buyer, but extend the time for amortizing covenants, expirations and good will to 15 years. Tax rate changes have raised maximum federal ordinary ... owner's death or departure will be handled. I feel that all agencies and producers should have such contracts for everyone's protection. Litigation exposure can be reduced if the agent understands how the risks arise, and makes plans to avoid them. Major areas of litigation exposure are errors & omissions, and protection of expirations. Proper insurance can reduce but not eliminate exposure. Alternate dispute resolution if properly used may reduce litigation risks and cost. A producer who is aware of his legal rights is in a better position to protect them without litigation ...

...elling the agency, the 1993 Clinton tax law changes make good will and expirat...se. On complex matters such as mergers and reorganizations, it can only sugges...

...n about net revenues; income before taxes; earnings before interest; taxes; depreciation and amortization (EBIT... that you'll be able to repay the loan and stay on a profitable footing, make sure your plans make sense and your expectations are in line with ...

...roll Reports Statements Taxes Year End Have accounting employees expand from these major areas into sub-areas, and then use this list to develop procedur...p accounting employee has the training and experience to cover the primary acc...

...people. At the least, obtain income tax returns for the past five years and c...ible, come up with a composite profit and loss statement, combined company volumes and loss ratios, and distribution by line of business. D...

...is: Every one dollar of adjusted pretax net earnings (profit) is worth approxi...s adapted from SAFECO's AGENT magazine and reproduced by permission. Blaine Pr...

...amp; Omissions (E&O) Liability, Tax Preparers' E&O, and programs for public libraries, ambulance companies, homes and services for the aging, auto repairs, ...es, sales are of paramount importance, and rewards are tied directly to premiu...

...ithholding social security or other taxes thereon. None of the employees of th...e numbering of the Sellers' warranties and representations in said section 3. ...

... The buyer is concerned with being able to make the payments 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 ... the agency interest is stepped up in basis) . 5.3 Commission splits after retirement or leaving agency. The parties sometimes agree to continue commission splits for a period of time after a producer retires or leaves the agency, with the agency owning the new expirations information it prepares for no additional payment. This approach is primarily used in two circumstances. One circumstance occurs when a retiring producer owns his expirations. Another circumstance occurs when a producer is given deferred commissions in the business he produces for the agency, but not an equity interest ... the expirations or the agency. If successful, this approach will make the commission split payments to the departing producer excludable from agency income. The deferred commission approach is increasingly being used today when producers with small books of business join up with a larger agency with more markets. The producer exchanges ownership of his expirations for a vested deferred compensation arrangement. This approach gives a better tax result for the agency, and need not be a detriment to the individual producer if the commission split compensates him fairly. 15% of the renewal ...

...t a time as possible, to reduce the tax cost of the acquisition. He also wants...dent, suffering both estate and income tax (with