Important financial decisions can create consequences extending far beyond today. Tax scenario modeling can help businesses and individuals evaluate potential tax implications before committing to a major course of action.
Many tax decisions aren’t simply yes-or-no decisions.
There may be several possible approaches.
Each can have different potential tax consequences.
Scenario modeling allows those alternatives to be considered before an important transaction or decision occurs.
Rather than discovering the tax result after the fact, clients can incorporate tax considerations into the decision-making process.
Tax returns generally report events that have already occurred.
Strategic tax advisory asks a different question:
What could happen if we take this path?
That distinction can be particularly valuable when considering significant financial or business decisions.
Luma’s advisory services specifically include modeling future tax scenarios before major transactions.
Before completing a significant business transaction, potential tax implications can be considered as part of the overall decision.
Different business structures can have different tax considerations. See Business Entity Tax Planning.
Businesses may want to consider tax implications associated with potential distribution decisions. See Profit Distribution Tax Planning.
Property transactions can create significant tax considerations. See Real Estate Tax Planning.
Entering another jurisdiction can change a company’s tax picture. See Multi-State Tax Planning.
Tax scenario modeling shouldn’t be based on guesswork.
Luma’s approach incorporates careful analysis and, where appropriate, research into relevant:
The objective is to help clients evaluate potential outcomes based on the facts and rules relevant to their situation.
Tax planning cannot guarantee a specific future outcome.
Circumstances can change.
Tax laws can change.
Transactions can evolve.
The value of scenario modeling is in considering available information and potential implications before a decision rather than ignoring tax considerations until afterward.
What is tax scenario modeling?
It involves evaluating potential tax implications associated with different possible decisions or transactions.
Why model taxes before a transaction?
Considering tax implications before a decision can help make tax consequences part of the planning process rather than discovering them afterward.
Does Luma provide scenario modeling?
Yes. Future tax scenario modeling before major transactions is specifically included in Luma’s Strategic Tax Advisory services.
Can this be used for business decisions?
Yes. Business transactions, entity choices, distributions and multi-state decisions can all involve forward-looking tax considerations.
Can individuals use tax scenario modeling?
Yes. Strategic advisory can also be relevant to significant personal financial or property decisions.
