Been there, done that, but I had the assistance of the Best CPA in the country

First you have to find out what is really important to each party, then design a contract that can reasonably achieve all of those goals, the buyout does not need to be traditional in nature,

do i remember your wife being a vet and taking over a practice? if so look at separating the building from the deal and signing a lease for 5 years,from the owner that would guarantee him rental income? look at part of the deal to include royalties to the original owner based on % of receipts for the next 2-3 years, helps soften the blow for the amount of money yall have to come up with and spreads his income out over a few years to help keep him in lower tax brackets

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Posted by LSUSUPERSTAR

Member since Jan 2005

16326 posts

Posted on 3/5/15 at 7:32 am to Tigerpaw123

quote:
do i remember your wife being a vet and taking over a practice?

Yes. That was the original plan when she started a few years ago and she has been running it for the most part as her own. She brings in over 85% of the revenue at this point.

We will be separating the building into a different loan but will talk about purchasing everything. We would rather purchase everything now so that he can retire and not be involved any longer. We do have a contingency that we could agree to a price and he could stay on as owner for another year or two, but he would have to increase her pay based on her production.

I'm hoping that he will see the value of having someone ready to buy right now. If not, he will have to put it on the market, and the potential owner will run the same numbers we did.

Thanks for all the advice. We are waiting for the official papers from our appraisal (we already went over the numbers in their office, just need the report). After that, we will sit down and try to reach an agreement.