RNCO’s client of many years had developed a 1,100,000 square foot office complex. The development of the project took in excess of 10 years and upon completion, the client considered a sale of the property. In connection with the decision, there was concern about the tax consequences as there was a substantial “tax deficit” capital.
After reviewing the economics of continued ownership versus disposition and the tax implications, RNCO concluded that a contribution of the property to a Real Estate Investment Trust (REIT) was a better choice compared to either continued ownership or sale. Subsequently, RNCO was instrumental in negotiating with the REIT a favorable tax outcome which included assurance of adequate debt allocation for a 10-year protection of potential income tax recapture.
RNCO reviewed several viable alternatives for the client, including the potential tax repercussions for each. In the end, the client was able to select the best economic results for all the partners and defer income tax consequences for an indefinite period of time.
RNCO was contacted to assist in the financial aspects of a start-up manufacturing company. The company had no sales history and needed guidance in financing the development of the business.
RNCO was able to find a financial partner for the manufacturer. Because of their wide client base, RNCO was able to partner the start-up manufacturer with a client looking for a financial investment.
They also recommended that year one costs be covered out-of-pocket to gain financial equity. This recommendation would keep the company from incurring additional debt service that would take years to retire. Subsequent to the first year, the manufacturer could then leverage the equity they built to grow and expand the business.
Finding the right financial partner and recommending the equity option were critical in the initial development of the manufacturing company. Over an eleven-year period, RNCO was deeply involved in financing of business operations, equipment acquisitions and a major expansion of the physical plant as well as providing accounting and tax expertise in general business matters. Today, the company has multiple plant operations and thrives with over $90 million in annual sales.
RNCO had been working with a client for seventeen years providing the accounting and tax needs of a growing business. It was time to sell the business she had built and she turned to RNCO for assistance.
Through RNCO’s clients, they were able to identify a company interested in establishing such a business in Chicago. RNCO worked with the client to define her financial needs and determined a market price that would allow her to move forward in realizing her dream.
The close partnership between RNCO and its client allowed the tough questions regarding her financial future to be addressed in order to help her define a path that would lead the way to realizing “her dream.” The ultimate payoff came with selling to a publicly-traded company. Today, RNCO continues to consult with her on financial matters and offers insightful financial advice.
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