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Seller financed practice buy-in and tax/loan ramifications

Home Financial Advisors Seller financed practice buy-in and tax/loan ramifications

  • Avatar aecarp 
    Participant
    Status: Other Professional
    Posts: 1
    Joined: 03/16/2018

    I am in the middle of negotiations to become partner at a practice with owner financing being the probable course of action. I am also on income based repayment (the wisdom of this perhaps a matter for another time or thread). My question to anyone who might have experience with this type of buy in is how is the “loan” handled as it relates to taxes and what I report for student loan purposes? Should I expect my taxable income to be reported prior to paying the loan or after? Thanks for any insight you might be able to provide.

     

    – Alex

    #111096 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 748
    Joined: 02/06/2016

    Hi Alex,

    I don’t know how to answer this question.  You might need to ask your accountant.  Or the practice you are buying into likely has a practice accountant.  Although they cannot advise you on the contract negotiation because that would be representing both sides of the transaction, they can give you an explanation of how the buy in is structured, and how it would be reported on your taxes.  But it would be worth it to speak with an accountant familiar with physician practices.  This is likely an expensive proposition and having good advice and good planning is worth the investment of paying an experienced professional.

     

    #111847 Reply

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