A dental practice is sold for a variety of reasons: retirement, moving to another city, or even because of health issues. Regardless of the reason, it is critical to consider the tax ramifications of the sale. Depending on the type of assets sold, the seller can pay federal and state taxes of up to 40% of the gain. For example, a majority, if not the entire amount of the equipment sold is likely to be taxable at the highest rates for both individual and corporate owners. This is because most dental equipment is written off in the year of purchase or depreciated over a 5 to 7 year period. Therefore, there is usually a minimal amount of basis in the equipment at the time of sale.
If a corporation owns real estate, the gain is taxed at the highest corporate rate. If an individual owns the real estate and leases it to the corporation or other legal entity, the tax on prior depreciation is 25% and the gain in excess of depreciation is 20%. Goodwill, patient records, and accounts receivable are also assets usually included in the sale of a dental practice and will be taxed at the 20% rate. Needless to say, the tax liability can be substantial resulting from an outright sale.
Example of an outright sale of a practice and resulting tax liability::
Equipment: $120,000 gain X 40% tax rate = $48,000
Receivables: $ 20,000 gain X 20% tax rate = $ 4.000
Records: $ 90,000 gain X 20% tax rate = $18,000
Real Estate $250,000 gain X 20% tax rate = $50,000
Goodwill $115,000 gain X 40% tax rate = $46,000
As you can see, the total tax liability of $166,000 on this hypothetical sale is staggering, but there is a way to defer these taxes … Read the rest
Going to the dentist is something that often inspires a great deal of dread among us, But this does not mean it isn’t a necessity. Maintaining good oral hygiene and keeping your teeth in tiptop shape is very important. This will necessitate regular visits to the dentist and therefore you will need to find someone suitable for this purpose. If you are searching for a suitable dental practice, these tips should help you out.
When looking for a dentist your first instinct might be to dive straight into the Yellow Pages. Is this the best way forward? Probably not. While the Yellow Pages will offer a host of listings, there will be no way to compare them and find out whether the services they offer are in line with what you are looking for.
In most cases it is a lot better to get some thorough information, and this can usually be achieved through personal referrals and recommendations. One place to go, therefore, would be to your local hospital or health care facility. The practising dentists there should be well aware of any top dental practice available in the local area.
There is no doubt that personal referrals and recommendations are the best way to go. It is, however, important that you trust the source. If you know a periodontist or orthodontist then they are certainly a good option.
Personal references from family members, close friends, colleagues, and neighbours, will also lead you in the right direction. This is particularly true if you have only just moved into the area. Your neighbour, for example, could well provide you with some relevant information about dental practices that might be suitable. Or perhaps one of your new colleagues if you have just started a new job.
If you are in a position … Read the rest