Intangible amortization when buying/selling a medical practice
By Reed Tinsley, CPA, CVA, CFP, CHBC
Medical Practice Broker, Physician CPA, Healthcare Consultant, Value Analyst, Author, Speaker
When buying or selling a medical practice, goodwill and covenant not to compete may be included in the purchase price. In addition, the seller may enter into some kind of a consulting agreement as part of the transaction. The tax treatment of goodwill, a covenant not to compete and a consulting agreement can be summarized as follows:
|Goodwill||Amortize 15 years||Sec. 1231 asset|
|Covenant not to compete||Amortize 15 years||Ordinary income|
|Consulting agreement||Deduct as incurred||Ordinary income|
These are but a few of the complex considerations and feasibility analysis that are taken into account when buying or selling a medical practice. As qualified medical practice brokers, Tinsley Medical Practice Brokers can help decipher your best options.