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
“Sorry Robert, we have done all we can and we are going to have to remove all of your teeth or you will not have enough bone and gum left in your jaw to use dentures.” This was the verdict that my husband was given by his periodontist after struggling with gum disease for twenty-eight years. He had seen his dentist and periodontist for years at great expense, undergoing three surgeries and deep cleanings in an attempt to control periodontal disease.
Despite these efforts, by this time, his teeth had become so loose that he could literally move them. He was unable to chew comfortably and was on a soft foods diet. He was in constant pain and had purplish discoloration on the inside of the gums surrounding the teeth. He is usually a very vibrant and energetic person; our kids say that he is “just like the Ever-Ready bunny, we just don’t know where he keeps his batteries.” Except that his energy had finally run out, and he was exhausted from pain and infection.
My background is in alternative medicine. My parents owned one of the first health food stores in Northern Nevada, and I was raised in the sure knowledge that given the opportunity, that is, the proper nourishment, support and mental and spiritual attitude, our bodies have the ability to heal themselves of most of our health challenges.
Robert had not been open to anything alternative, up to the point that they sent him home from the periodontists office with a sedative and an appointment to have his teeth removed. He really thought that his dentist would be able to get his gum disease under control and he saw no reason to look anywhere else. When he told me what they had planned, I reminded him that … Read the rest
Dental filling, otherwise known as dental or tooth restoration, is the method by which dentists restore missing parts of the tooth structure or even a missing tooth. Dentist do it in such a way that the integrity, function, and morphology of the tooth structure remain intact. This process uses different types of dental restoration materials. A missing tooth structure supported by dental implants can also be restored through this procedure.
The Need for Tooth Restoration
Caries or dental cavities due to decay are one of the main reasons for the structural loss of a tooth. A part of or a whole tooth could be missing due to an external trauma such as an accident or fraction of the tooth. A previously placed restoration would have deteriorated creating the need for re-restoring it. Intentional loss of structure of the tooth may occur when dentists prepare the tooth for aesthetic improvements.
Restoring a Tooth Directly or Indirectly
The technique of direct restoration involves keeping a prepared soft filling into the tooth. The filling sets and becomes hard while in contact with the tooth. This procedure does not damage the tooth because it passes very limited energy on to the tooth during the setting process. Experts advise this method for restoration in areas that are unacceptably to under heavy pressure during chewing. A single visit to the dentist would suffice for this procedure. On the contrary, indirect dental restorations involve the technique of using dental impressions of the prepared tooth to fabricate tooth restoration externally. Crowns, bridges, inlays, and onlays are the common indirect restorations. This is then permanently fixed with dental cement. This process requires a minimum of two visits to the dentist.
Different Tooth Restoration Types
There are many ways for teeth restoration and the most common type is the filling … Read the rest