Pub. 5 2016 Issue 7

September 2016 25 l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s costs to consider. A third-party sale must involve thoughtful consideration to meet the owner’s objectives, which may not be limited to maximizing the sale price. 3. Is the business ready for a transition? A realistic assessment of where the business stands today includes a detailed review of its key areas, including lending, sales and marketing, accounting systems, management information and technology. Changes in operations or the ownership structure may be needed to facilitate the transfer in the desired manner and at the appropriate value. 4. What are the income, estate and gift tax consequences of making a transition? The business is often the most significant asset within the owner’s estate; therefore, tax planning must address not only current income tax issues, but also estate and gift tax issues and related income tax basis considerations for heirs. The owner’s personal charitable objectives also may help reduce the transition tax cost. 5. What are my cash flow and lifestyle consequences after the transition? Personal wealth planning is essential for a successful ownership transition. It influences how a business transition will be accomplished, and at what price. The after-tax results of any proposed transition should be projected to confirm that sufficient resources will be available to meet the owner’s living needs, charitable intentions and family legacy objectives. 6. What will I do when I’m no longer immersed in running the business? The owner should determine nonmonetary retirement objectives and develop a plan to achieve them. This may include travel, more time with family, charitable or civic pursuits or starting a new business. This brief discussion won’t solve the business owner’s succession dilem- ma, but it may provide a framework to help identify the areas of greatest concern and a place to start the process. Recognize that the answer to one of the questions will often affect, or depend on, the answer to another. The process takes significant thought, coordination and time. There’s no better time to start than now! (This article was adapted from an article originally published in the March 2015 issue of Ingram’s Magazine.) This article is for general information purposes only and is not to be considered as legal advice. This information was written by qualified, experienced BKD profes- sionals, but applying this information to your particular situation requires careful consideration of your specific facts and circumstances. Consult your BKD advisor or legal counsel before acting on any matter covered in this update. Teal and Kara both are members of BKD’s National Tax team providing estate and gift tax planning and business succession consulting to clients. Article reprinted with permission from BKD, LLP, bkd.com. All rights reserved. Business can be complicated. Make it a little less taxing. WWW.MOSSADAMS.COM/FI Serving clients from 29 locations, including Kansas City: (913) 599-3236 For more than a century, we’ve helped clients reduce risk, save money, and plan for the future through industry-smart tax, assurance, and consulting solutions. With big-firm resources and partner-level attention, what will you accomplish?