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Is there an Exit at the End of Your Rainbow? 03/17/2016

Posted by Morse Barnes-Brown Pendleton in Corporate, M&A, Taxation.
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There was green alligators and long-neck geese.

There was humpy bumpy camels and chimpanzees.

There was catsandratsandelephants, but sure as you’re born

the lovliest of all was the Unicorn. 

– from “The Unicorn” by Shel Silverstein

unicornToday I am reminded of “The Unicorn,” by Shel Silverstein and popularized in song in the ’60s by The Irish Rovers.

Besides a catchy tune (which gets better by the pint), a “unicorn” is a start-up company whose value exceeds $1 Billion.

While not every start-up will be a unicorn, every start-up can hope for a favorable exit.

From a tax perspective, however, we have seen the excitement surrounding an exit be dampened by improper tax elections (e.g., S corporation elections, 83(b) elections), faulty granting of equity compensation, non-compliant deferred compensation plans, and incorrect state, sales and/or employment tax filings, to name just a few.

My message for you this St. Patrick’s Day:  Avoiding tax issues in M&A does not require the luck o’ the Irish, just competent tax advice.

Is it time to start thinking about securing your pot of gold? Contact Diana Española.

 

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