KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
You can read all of our articles on our website. Having trouble getting our emails?  Change your spam controls and whitelist ken@kirschenbaumesq.com 
****************************** 
Mixing consult fee with sale price / ISC meetings – schedule your meeting now / Holiday Party 2024 - rsvp if attending
November 7, 2024
*************************
Final days to schedule your free private meeting with KK at ISC East
No "last minute" meetings will be scheduled.
***************************
    If you're interested in a private [yes, it's free] meeting at ISC East [we will be meeting just outside the exhibit hall] please contact Stacy Spector,Esq at 516 747 6700 x 304 or SSpector@Kirschenbaumesq.com. Concierge Clients will have priority.
*************************
Mixing consult fee with sale price 
*************************
Ken:
What are your thoughts of structuring the deal with the twist of the ‘consultation’ being part of the equation to reduce our taxable portion – what advantages / disadvantages to each party?
Joe
********************
Response
*******************
          Sellers sometimes are engaged for compensation as part of the buy-sell transaction.  It can be a problem when there are more than one shareholder and they are distrustful about the deal because one may think the sale price was reduced and allocated to one shareholder collecting a consulting fee.
          Of course consulting engagements and compensation come in different variety.  Most common, consulting that actually requires the consultant to perform some useful work, and engagements where the consultant is not expected to do anything, leaving what is done to the consultant’s sole discretion.  The later starts to smell like a disguised allocation of the purchase price.
          I don’t see much advantage to the allocation to the consultant fee from a tax perspective [thought I would yield to Mitch Reitman for tax advice].  The consultant fee is ordinary income to the consultant, taxed at ordinary earned income rates.  The sale price gets capital gain treatment, which has a reduced tax rate.
          The consultant fee is fully deductible by the company paying the fee as a business expense, in the nature of W2 or 1099.  The purchase price on an acquisition is depreciable rather than deducted as a business expense [by the way, this is not tax advice, so “better call Mitch” if in doubt.]
          If a seller wants to spread the purchase price out for tax purposes then take the purchase price over time. K&K will handle your buy or sell; we let the tax experts handle the tax and accounting issues.
**************************
Holiday Party 2024 – this is your invitation - rsvp if attending
**************************
          The K&K Holiday Party will be on December 12, 2024 in Old Westbury, NY from 6:30 to 9:30 PM.  You’re invited, but you do need to RSVP before December 1, 2024 so we can properly plan.  Format is casual dress, cocktails and plenty of pass-around hors d'oeuvres; you won’t leave hungry.  Please send your RSVP to Kathleen Lampert at 516 747 6700 x 319 or KLampert@Kirschenbaumesq.com or Amy Laveglia at 516 747 6700 x 313 or ALaveglia@Kirschenbaumesq.com.
          Come see old and meet new friends at this social event.  Looking forward to seeing you at the party.
************************
STANDARD FORMS  Alarm /  Security / Fire and related Agreements
 click here: www.alarmcontracts.com
***************************
CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304.
***********************
ALARM ARTICLES:  You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles  updated daily             ********************
THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily
*************************
Wondering how much your alarm company is worth?  
Click here:  https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth
******************************
Getting on our Email List / Email Articles archived: 
    Many of you are forwarding these emails to friends or asking that others be added to the list.  Sign up for our daily newsletter here: Sign Up.  You can read articles and order alarm contracts on our web site www.alarmcontracts.com
**************************
Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com