allowableOwner compensation
Owner and family health insurance
Premiums for the owner and family paid through the business that a buyer or new manager would not incur.
Rule
Add back premiums specific to the owner's family. Premiums for a replacement manager's own coverage are generally not added back.
Evidence lenders expect
- Insurance invoices showing covered individuals
- General ledger detail
Worked example
As reported
Health insurance expense $31,200
In the memo
Owner family portion $22,800 added back
The objection you will hear
Adding back the full line including employee coverage.
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