It’s not business, it’s personal – Personal goodwill offers opportunities for M&A planning

Description

Abstract: Parties to merger and acquisition (M&A) transactions involving closely held corporations may enjoy certain tax benefits if they can allocate a portion of the purchase price to individual shareholders’ personal goodwill. This article explains how it works. Although the IRS doesn’t much like personal goodwill, a sidebar discusses a recent Tax Court case confirming that goodwill remains a viable tax-planning tool under the right circumstances.