Tax & Deal Structure
The One Page That Could Change Your Dental Practice Taxes
January 27, 2026 · 8 min read
Most dentists read the price, the restrictive covenant and the closing date. Very few read the allocation schedule — the page that quietly sets your tax deductions for the next fifteen years.
What allocation actually does
The total purchase price is split across asset classes: equipment, supplies, leasehold improvements, a restrictive covenant, and goodwill. Each class carries its own recovery period, so two identical prices can produce very different after-tax outcomes.
Why the seller pushes back
Allocation that helps the buyer accelerate deductions typically increases the seller's ordinary income. This is a negotiation, and it should be priced.
Get it into the letter of intent
Once the definitive agreement is drafted, allocation becomes a late-stage fight nobody wants. Put your proposed split in the LOI so it is priced into the deal from the start.
“Before you sign, know what you're really buying.”
Key Takeaways
- Allocation determines your depreciation and amortization schedule.
- Goodwill amortizes over 15 years; equipment moves far faster.
- Buyer and seller have opposing incentives — negotiate it deliberately.
- Allocation belongs in the LOI, not the closing binder.
Recommended Resource
The Dental Built to Own Blueprint
The CPA-led guide to valuing, negotiating and financing a dental practice purchase — plus a call with Kingsley Ifedi, The Dental CPA.