Atlantic Highlands, NJ, October 12, 2010— A Neumann & Associates, respected business brokers and business valuation firm in New Jersey, announced they will assist New Jersey business owners and buyers expedite the business transfer process in order to take advantage of a limited-time tax break.
Last month the Small Business Jobs Act was signed into law in large part to help entrepreneurs with tax cuts and loan availability. The bill provides more than $12 billion in tax breaks, and is of significant interest to New Jersey business buyers and sellers in that it eliminates all capital gains taxes on small business investments held more than five years.
That’s good news—possibly great new—for entrepreneurs interested in purchasing a business, as well as for business owners, considering putting their businesses up for sale either through a NJ business broker or going the business for sale by owner route. However, there is only a three-month window on this opportunity and the clock is ticking.
The business transfer process must take place prior to January 1, 2011. After this date the tax break drops back to 50%.
“This capital gains tax break is significant for many reasons, not the least of which is that for the first time investments in accounting, architecture and law firms, plus hotels, restaurants and some other kinds of businesses are now eligible,” according to Achim Neumann, President of A Neumann & Associates, NJ business brokers. “Previously these types of businesses simply weren’t eligible.”
This 100% capital-gains tax break is an extension of relief for investors that has been in place since last year’s stimulus. The Recovery Act allowed investors to exclude 75% of their profits if they invested in eligible small businesses between mid-February 2009 and the end of this year.
“This tax break is a terrific incentive, however the economics still need to add up, and sound business valuation techniques applied,” said Neumann. “We’re seeing a real shift back to basics among our clients when it comes to understanding how to price a business, and business sellers are faring much better than they had anticipated in this economic climate.”
According to the White House, an estimated 4.5 million small businesses and individuals will be able to make new business investments under this provision and earn a larger break on their taxes for this year.
For many considering taking advantage of the break, the questions of how to price a business and what business valuation methods to use are driving concerns. With over 25 years assisting buyers and sellers with the business transfer process, A Neumann & Associates knows how to translate discounted cash flow valuation techniques into real world logic. They have built a reputation as the premier NJ business broker and can provide New Jersey business owners and sellers with a brief evaluation to see if they qualify for this substantial tax break. For more information, please contact A Neumann & Associates at 732-872-6777.