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Tax treatment of the practice purchase price

The number and quality of fiscal cliffs in the adoption of a medical or dental practice can not be underestimated.

To illustrate the problem of price depreciation we go by way of example of a purchase price of EUR 250,000 from.

The payment of the purchase price to the seller acts first as a cash outflow (in the example EUR 250,000) from. The purchase price is allocated for the determination of the tax depreciation on the acquired tangible and intangible assets (practical value - patient base, location of practice, organization, etc.).

The physical assets (equipment practice) result in the rule from the inventory of the vendor, which is clean, if necessary, to intermediate and disposals. The value of physical assets can be valued at their fair value at delivery be. The tax book value of the seller are responsible for determining the value for the acquirer irrelevant.

The value of intangible assets - usually the main trunk of the patient - is the difference between the purchase price and value of physical assets.


recommends, from a practical point of view, early (before the completion of the purchase agreement) together with the donor colleagues to create an inventory list to avoid misunderstandings about the scope of the on going inventory. Not infrequently advised the parties in the course also in dispute.

The payment of the purchase price goes to practice depreciation in the annual tax income to a determination. With depreciation, the tax implications of the purchase price payments over a number of years to be distributed. To this end, the life of the practice value is estimated. 5 years and the distribution of the practical value of a group practice of 7 - - Of the financial institutions and law, the distribution of the practical value of a solo practice for 3 is 10 years recognized. In the utilization of these periods there is a certain amount of latitude.

We estimated the useful life such as 4 years, amounts to EUR 250,000 Depreciation: 4 years = EUR 62,500.

While the purchase price effect on liquidity, was the annual depreciation are not cash effective. To determine the cash flows from the practice of the tax results are thus added to include the depreciation.

Other investments - such as inventory or equipment practice - are tax to distribute depreciation over their useful lives. Renovation and maintenance expenses are generally immediately deductible business expenses and thus have from both taxes and liquidity, in the year of payment.