Dental Tribune USA

Silent partners invest in great dental practices nationwide

By Dental Tribune USA
April 14, 2021

The national consolidation of dental practices has accelerated in the COVID era. Larger practices of all specialties are achieving record values by selling a part of their practice to silent partners for cash now and greater wealth later.

Doctors remain as owners and continue to lead their practice for years or decades with their brand, team and strategy. They diversify their personal net worth and benefit from the resources of a larger, silent partner to reduce administrative headaches, gain superior marketing, reduce costs and receive higher reimbursement rates.

Invisible Dental Support Organizations (IDSO) quietly partner with doctors by purchasing 51 percent to 90 percent of a great practice for cash up front with the doctor retaining ownership in the balance. The doctors’ retained ownership can be liquidated at a set date in the future resulting in large gains — in some cases exceeding two times, three times and even 10 times the practice’s initial value.

Large Practice Sales has completed hundreds of millions of dollars of IDSO transactions in the last 24 months for doctors as young as 34.An IDSO partnership is not a short-term retirement plan but rather a long-term wealth creation strategy for doctors of all ages. Doctors utilize their IDSO partners to expand, add associates, start new offices or acquire additional practices.

Increased taxes in 2022 and beyond

President Biden has repeatedly committed to eliminate the long-term capital gains tax treatment for those earning more than $400,000 per year. A sale of part of your practice in 2022 and beyond could result in the doubling of your federal tax rate from 20 percent to about 40 percent. This would be in addition to state tax in 43 states. Doctors in New York, California and other states could be facing total taxes in 2022 of more than 50 percent.

The process to understand the value of your practice to an IDSO

Many doctors are surprised to learn that through a confidential and simple process, LPS can discover the value of their practice in an IDSO transaction without cost or obligation. The LPS valuation is based upon actual transactions with IDSOs across the country, not a costly, theoretical valuation model. Doctors are urged to start this process by June 1 such that if the decision is to pursue an IDSO partnership, there will be sufficient time to complete a transaction in 2021.

To learn more call (855) 533-8747 to arrange an introductory phone call or visit IDSOTransactionAdvisor.com for additional details.

(Source: Large Practice Sales)

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