Personal Goodwill Allocation for Tax

Business Valuation Enabled Savings of $216,000


The service business, valued at $1.1 million, was an asset sale of a C Corporation and the seller was at risk of significant double taxation on the proceeds. Based on the highly thorough and accurate company valuation done previously for the sale of this business, Merrimack Business Appraisers President Lou Pereira was retained as the certified business appraiser for business valuation services for the tax filing.

Merrimack Business Appraisers’ Approach

Lou Pereira’s comprehensive and detailed business valuation report clearly identified and separated the personal goodwill of the seller, which significantly reduced his tax liability. He applied a multi-variable analysis that qualified and quantified the amount of personal goodwill.

Valuation Outcome

As a result of the company valuation, the seller saved approximately $216,000 in taxes.


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