Physician Buy In - PowerPoint PPT Presentation


PPT – Physician Buy In PowerPoint presentation | free to download - id: 335b1-MTJjN


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation

Physician Buy In


When Was the Last Time the Practice's Buy/Sell Agreement Was Reviewed? ... Non-Death: Immediate Full Buy Out Payment or Installment Payments ... – PowerPoint PPT presentation

Number of Views:59
Avg rating:3.0/5.0
Slides: 13
Provided by: reedti
Learn more at:
Tags: buy | physician


Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Physician Buy In

Physician Buy In Buy Out Arrangements
  • Reed Tinsley, CPA, CVA, CFP
  • Houston, Texas

Topics for Discussion
  • Financial Aspects of a Buy In
  • Financial Aspects of a Buy Out
  • Tax Issues
  • Non Financial Contract Issues

A Good Starting Point
  • When Was the Last Time the Practices Buy/Sell
    Agreement Was Reviewed?
  • A Ticking Time Bomb for a lot of Practices
  • Should be an Annual Review
  • With Review of Buy Out Calculations with the
  • Vote to Admit a New Owner

Physician Buy In Special Issues
  • Characteristics of a Potential Partner
  • When Should the Buy In Occur
  • After 1 year, 2 years, 3 years?
  • Idea At Time of Financial Self Support
  • Should the Buy In Include an Intangible Factor
    (i.e. Goodwill)
  • Others?

Calculating the Buy In
  • FMV Appraisal
  • Depends on Owner Compensation Formula
  • Fixed Formula
  • A/R of Buy In Physician
  • FMV of Fixed Assets, Net of Related Liability
  • Intangible
  • Fixed Amount
  • Percentage of Physicians Prior 12 Mo. Collections

Paying for the Buy In
  • Third Party Loan
  • Practice Financed Loan (co-signator)
  • Reduced Compensation
  • Fixed Assets with After Tax Dollars
  • Others?

Buy Out Events
  • Death
  • Retirement
  • Disability
  • How is Temporary Disability Handled
  • Should Overhead Disability Insurance be
  • Employment Termination

Calculating the Buy Out
  • Should Buy Out Mirror the Buy In Formulary?
  • Buy Out Calculation
  • FMV Appraisal
  • Formula Approach
  • Restricted Formula Approach if Departing
    Physician Competes (assuming no competition
  • Separating Physicians A/R From Total Buy Out

Paying For the Buy Out
  • Life Insurance Proceeds if Death
  • Non-Death Immediate Full Buy Out Payment or
    Installment Payments
  • Issue If Corporation, Allocation of Payments to
    Treasury Stock
  • Will It Create Phantom Income?

Tax Issues
  • Section 1060
  • Reporting requirements for acquisitions of
    interests in entity from 10 owner.
  • If a 10 owner with respect to an entity
    transfers an interest in the entity and, in
    connection with the transfer, that owner (or a
    related person) enters into
  • ... an employment contract,
  • ... a covenant not to compete,
  • ... a royalty or lease agreement,
  • ... other agreement, with the transferee, the
    owner and the transferee must furnish, at a time
    and in a manner to be specified by IRS, whatever
    information IRS may require.
  • Constructive Receipt Issues

Non Financial Issues
  • Restrictive Covenant
  • Involuntary Removal of an Owner
  • Temporary Disability
  • Divorce
  • Timing of Voluntary Retirement
  • Side Bar Issue When can a doctor get off the
    call schedule (and at what price)?

  • Reed Tinsley, CPA