Tax Impact of Reverse Earn-Outs

Tax Impact of Reverse Earn-Outs | Neil Bass

In February 2016, we discussed the tax accounting impact of contingent consideration agreements, otherwise known as earn-outs. It is increasingly common for deals to include earn-out clauses. For example, if the target company performs well, the buyer will pay an additional sum of money at some future time. Sometimes deal-makers get creative, however, causing complications and headaches for the tax advisors involved.

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