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[From the NADA] For Buick dealers who have opted to accept buyouts offered by GM to voluntarily terminate their Buick franchise agreements, experienced CPA Jay Goldman, who serves as chair of Boyer & Ritter LLC’s Dealership group, has identified some important tax issues related to the buyout compensation paid by GM for consideration.
What You Need to Know
Please see example below:
If the Buick franchise was purchased with other franchises simultaneously and the entity continues to own them, the Buick goodwill would continue to be amortized with the other franchises and the entire amount of the proceeds would be considered capital gain.
The information provided here is for informational purposes only and does not constitute legal or tax advice. Affected Buick dealers should consult their attorney, CPA or other professional advisor familiar with the applicable laws to obtain specific advice regarding these matters to ensure proper tax reporting for their specific transactions.
Jay Goldman works in Boyer & Ritter LLC’s office in Camp Hill, Pennsylvania and may be reached at 717.761.7210 or jgoldman@cpabr.com.
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