{"id":398,"date":"2026-09-21T05:01:39","date_gmt":"2026-09-21T05:01:39","guid":{"rendered":"https:\/\/dentaltransitions.com\/articles\/selling-dental-practice-to-dentist\/"},"modified":"2026-09-21T05:17:23","modified_gmt":"2026-09-21T05:17:23","slug":"selling-dental-practice-to-dentist","status":"publish","type":"post","link":"https:\/\/dentaltransitions.com\/articles\/selling-dental-practice-to-dentist\/","title":{"rendered":"How To Sell Your Dental Practice To Another Dentist"},"content":{"rendered":"<h2 id=\"key-takeaways\">Key Takeaways For Doctor-To-Doctor Sales<\/h2>\n<ul>\n<li>A doctor-to-doctor dental practice sale functions as a financing event where the buyer\u2019s bank sets the realistic price ceiling based on cash flow and underwriting criteria.<\/li>\n<li>Choosing the right sale structure (walk-away, work-back, partnership\/vest-out, or goodwill-only) can shape price, timeline, tax outcomes, and post-sale involvement.<\/li>\n<li>A CPA-led EBITDA valuation built from actual financial records can support the price; informal estimates often collapse during due diligence and lead to reductions.<\/li>\n<li>Preparing a complete buyer-and-lender document package before marketing, understanding lender underwriting, and maintaining strict confidentiality can keep deals on track and reduce re-trades.<\/li>\n<li>McLerran &amp; Associates provides sell-side-only advocacy, CPA-grade valuations, confidential marketing to pre-qualified buyers, and full-process support backed by roughly 2,000 successful practice sales and approximately $2 billion in closed transaction volume.<\/li>\n<\/ul>\n<p><a href=\"https:\/\/dentaltransitions.com\/contact-us\/\" class=\"solid-button\" target=\"_blank\">Talk to a sell-side advisor about your practice\u2019s timeline.<\/a><\/p>\n<h2>How To Sell Your Dental Practice To Another Dentist: Step By Step<\/h2>\n<ol>\n<li>Decide what you are actually selling: a walk-away sale, a sale with a longer work-back, a partnership\/vest-out, or a patient-base\/goodwill-only sale.<\/li>\n<li>Get a dental-specific valuation built on a CPA-led EBITDA analysis, rather than a free back-of-the-napkin number.<\/li>\n<li>Build the buyer and lender package before the practice is shown so the deal is financeable from day one.<\/li>\n<li>Understand how the buyer&#8217;s lender underwrites the deal, because those criteria set the realistic price ceiling.<\/li>\n<li>Market confidentially and screen buyers for financing before investing months with the wrong one.<\/li>\n<li>Negotiate the LOI and understand how the purchase price is allocated across equipment, goodwill, and non-compete.<\/li>\n<li>Plan the transition and work-back around the buyer&#8217;s financing, patient continuity, and your own timeline.<\/li>\n<li>Close with an advocate on your side who is sell-side only and aligned with you.<\/li>\n<\/ol>\n<h2>Step 1: Choose The Sale Structure That Fits Your Goals<\/h2>\n<p>Doctor-to-doctor sales follow several common structures, and that choice shapes price, timeline, tax outcome, and how much of your life the transition consumes.<\/p>\n<p>The four main structures are:<\/p>\n<ul>\n<li><strong>100% walk-away sale.<\/strong> The seller typically works back roughly 4\u20138 weeks and exits. This is the cleanest structure and the most common for single-doctor practices where the buyer becomes the primary producer immediately.<\/li>\n<li><strong>100% sale with a longer work-back or associate contract.<\/strong> The seller stays on for 6\u201312 months or longer, often at a production split, to support patient continuity and insurance recredentialing. Lenders frequently require this when the selling dentist generates a large share of collections.<\/li>\n<li><strong>Partnership\/vest-out.<\/strong> The seller sells roughly 50% of the practice now to a future partner who buys the remaining share over time. This structure fits larger practices that can support 2 or more doctors and sellers who want to stay clinical for several more years while reducing ownership risk.<\/li>\n<li><strong>Patient-base\/goodwill-only sale.<\/strong> The seller transfers the patient base and goodwill without a full practice infrastructure sale. This is less common and typically applies to narrow situations such as a retiring dentist whose lease cannot be assigned.<\/li>\n<\/ul>\n<p>Each structure carries a different trade-off between speed, price, and control. A walk-away sale tends to move faster and stay cleaner. A vest-out can preserve more of the seller&#8217;s income over time but extends the transition. A structure chosen without planning, or shaped entirely by the buyer\u2019s lender, can reduce both price and flexibility.<\/p>\n<h2>Step 2: Get A Dental-Specific Valuation<\/h2>\n<p>Doctor-to-doctor deals usually rely on 2 valuation methods. The first is a <strong>percentage of collections<\/strong>, applied as a range of the practice&#8217;s trailing 12-month gross collections. <a href=\"https:\/\/privatepracticeresearch.org\/reports\/how-dental-practices-are-valued-2026\" target=\"_blank\" rel=\"noindex nofollow\">A 2026 framework from Private Practice Research<\/a> places the general range for private-buyer transactions at roughly 65\u201385% of annual gross collections for general practices. The bottom of that range applies to practices with high overhead, owner-dependent production, or declining collections. The top applies to practices with associate-driven production, a growing patient base, and a strong payer mix.<\/p>\n<p>The second method is a <strong>multiple of net cash flow or EBITDA<\/strong>, which rewards profitability rather than just revenue volume. <a href=\"https:\/\/privatepracticeresearch.org\/reports\/how-dental-practices-are-valued-2026\" target=\"_blank\" rel=\"noindex nofollow\">The same 2026 framework notes<\/a> that 2 practices collecting identical amounts can be worth materially different amounts based on their underlying profitability.<\/p>\n<p>The <a href=\"https:\/\/www.ada.org\/\" target=\"_blank\" rel=\"noindex nofollow\">American Dental Association<\/a> offers general guidance on valuation ranges as a starting point, but any such figure remains a starting point. The method should match the sale path, and the analysis should be built from your actual financial records rather than a rule of thumb.<\/p>\n<p>A back-of-the-napkin number often becomes the anchor that determines what you walk away with. Dental M&amp;A attorneys consistently observe that sellers who understand their adjusted EBITDA and address value-killers before going to market can achieve materially better outcomes than those who call for help after signing an LOI. A weak valuation analysis tends to get challenged in due diligence and re-traded.<\/p>\n<p>McLerran &amp; Associates is a dental-only, sell-side advisor and advocate that has evaluated more than 10,000 practices. Every engagement is built on a CPA-led EBITDA analysis with every add-back unpacked. That diligence-grade work happens up front so the number can hold up under buyer scrutiny and the deal is less likely to be renegotiated down later. McLerran controls the narrative around your EBITDA and focuses on selling practices rather than simply listing them.<\/p>\n<figure style=\"text-align: center;\"><img src=\"https:\/\/cdn.aigrowthmarketer.co\/1782231605342-03c5ed4725a3.jpeg\" alt=\"At McLerran &amp; Associates, every engagement is built on an ironclad, CPA-led EBITDA analysis and practice valuation.\" style=\"max-height: 500px;\" loading=\"lazy\" decoding=\"async\"><figcaption><em>At McLerran &amp; Associates, every engagement is built on an ironclad, CPA-led EBITDA analysis and practice valuation.<\/em><\/figcaption><\/figure>\n<h2>Step 3: Build The Buyer And Lender Package Before You Market<\/h2>\n<p>A complete document package gives buyers and their banks what they need to underwrite the deal and can prevent mid-process surprises. Dental acquisition lenders typically require a comprehensive file before underwriting begins, so assembling it early can make the practice financeable from the first conversation.<\/p>\n<p>Lenders underwrite from documents, not from the practice&#8217;s reputation, so the package should answer every question a bank will ask before it asks. The core file covers:<\/p>\n<ul>\n<li>3\u20135 years of business tax returns<\/li>\n<li>Profit and loss statements (P&amp;Ls) for the same period, plus current-year year-to-date financials<\/li>\n<li>Production reports by provider and by procedure code<\/li>\n<li>Hygiene production and recall reports<\/li>\n<li>Active patient count (patients seen in the last 18 months) and new patients per month<\/li>\n<li>Case acceptance rate and recall rate<\/li>\n<li>Accounts receivable aging report, segmented by payer<\/li>\n<li>Fee schedule and insurance payer mix with write-off percentages<\/li>\n<li>Staff roster with tenure and compensation<\/li>\n<li>Equipment list with ages and condition<\/li>\n<li>Office lease with remaining term, renewal options, and assignment provisions<\/li>\n<li>Existing loan and debt schedules<\/li>\n<\/ul>\n<p>McLerran handles much of this work for the owner by remotely accessing practice management software, pulling the necessary reports, and cross-referencing the data against the financials. The seller grants access once, and McLerran builds the package.<\/p>\n<h2>Step 4: Understand How The Buyer\u2019s Lender Underwrites The Deal<\/h2>\n<p>Even a strong valuation and a complete document package can stall at the lender stage, because the buyer&#8217;s bank, not the buyer, decides what the practice can actually support.<\/p>\n<p>The buyer&#8217;s bank does not simply take the agreed purchase price on faith. Lenders underwrite dental practice acquisitions by reviewing several factors: the practice&#8217;s cash flow relative to the proposed debt service, the stability of collections over time, patient retention metrics, payer mix, and the buyer&#8217;s own credit and liquidity. <a href=\"https:\/\/dentalpracticeinsider.org\/tools\/loan-calculator\" target=\"_blank\" rel=\"noindex nofollow\">SBA 7(a) lenders for dental practice acquisitions typically require a minimum debt service coverage ratio (DSCR) of 1.25, though some will approve at 1.15\u20131.20 with strong credit and a larger down payment<\/a>. DSCR means the practice should generate at least 25% more cash flow than required to cover all debt payments.<\/p>\n<p>DSCR is calculated as the practice&#8217;s adjusted cash flow minus a replacement salary for the buyer, divided by the proposed annual loan payment. If that ratio falls below the lender&#8217;s threshold at the agreed price, the lender may decline to fund the deal at that number.<\/p>\n<p><a href=\"https:\/\/baystreetlending.com\/lending-resources\/sba-loans-for-dental-practice-acquisition\" target=\"_blank\" rel=\"noindex nofollow\">SBA 7(a) acquisition loans for dental practices typically require a down payment starting at 10% of project cost<\/a>, with rates and terms that vary by lender and loan size. Payer mix is a primary driver of the gap between gross billing and net collections and can directly set the ceiling on how much debt the practice can support. A practice with heavy Medicaid exposure may net significantly less per dollar of gross billing than a fee-for-service practice, which compresses the supportable loan amount.<\/p>\n<p><a href=\"https:\/\/baystreetlending.com\/lending-resources\/sba-loans-for-dental-practice-acquisition\" target=\"_blank\" rel=\"noindex nofollow\">The single most scrutinized document in dental acquisition underwriting is the production-by-provider report<\/a>. Lenders split collections between the selling doctor, associates, and hygiene. A practice where the seller personally produces the vast majority of collections presents a revenue-retention risk that the lender will price accordingly, either by reducing the loan amount or by requiring a longer work-back period documented in the purchase agreement.<\/p>\n<p>Lenders also commonly require the seller to sign a non-compete and to work back for a defined period. A practice with clean, well-documented financials can support a higher number. One with gaps, inconsistencies, or undocumented add-backs gives the lender reason to reduce the supportable price.<\/p>\n<p>Because lender criteria can change, sellers should confirm current thresholds and terms directly with a dental-specific lender. An advisor who understands those criteria in advance can prepare the practice to clear them, which is where McLerran&#8217;s sell-side role begins while it stays in its lane as advisor rather than lender or attorney.<\/p>\n<p><a href=\"https:\/\/dentaltransitions.com\/contact-us\/\" class=\"solid-button\" target=\"_blank\">Find out what your practice is really worth with a comprehensive valuation.<\/a><\/p>\n<h2>Step 5: Market Confidentially And Screen Buyers<\/h2>\n<p>Confidentiality protects the practice during a sale and can preserve value. Staff and patient disclosure before the deal is real can destabilize operations, reduce value, and in some cases end the transaction.<\/p>\n<p>The <a href=\"https:\/\/www.ada.org\/\" target=\"_blank\" rel=\"noindex nofollow\">American Dental Association<\/a> advises that confidentiality arrangements should be in place before a purchaser reviews any sensitive material. The standard posture is NDA-first: no financial documents, no production reports, and no identifying information are shared until a prospective buyer has signed a confidentiality agreement. In a well-run process, every buyer accepts a confidentiality agreement before a single document loads, with that acceptance timestamped against their identity, which gives the seller recourse against anyone who signs and then misuses the information.<\/p>\n<p>Marketing channels for a confidential doctor-to-doctor sale can include dental association networks, confidential practice marketplaces, direct outreach to associates, study-club and education-group relationships, and targeted direct mail or geofencing. These channels allow targeted exposure without a public listing that alerts staff, patients, or competitors.<\/p>\n<p>Qualifying a buyer&#8217;s financing early also protects the process. Asking for a lender pre-qualification or proof of funds before investing months in a buyer who cannot close is standard practice in a well-run sale. <a href=\"https:\/\/baystreetlending.com\/lending-resources\/sba-loans-for-dental-practice-acquisition\" target=\"_blank\" rel=\"noindex nofollow\">A buyer who gets pre-underwritten before signing an LOI can compress the post-agreement timeline by 2 to 3 weeks and make a faster close more credible<\/a>.<\/p>\n<p>McLerran maintains a large premier private-buyer pool with thousands of pre-qualified buyers and runs confidential showings, typically after business hours, so staff and patients remain unaware of the process until the deal is real.<\/p>\n<figure style=\"text-align: center;\"><img src=\"https:\/\/cdn.aigrowthmarketer.co\/1782231581955-2aa75d9d4697.jpeg\" alt=\"McLerran &amp; Associates team: McLerran is the nation&#039;s largest dental-specific sell-side M&amp;A advisory and brokerage firms\" style=\"max-height: 500px;\" loading=\"lazy\" decoding=\"async\"><figcaption><em>McLerran &amp; Associates team: McLerran is the nation&#039;s largest dental-specific sell-side M&amp;A advisory and brokerage firms<\/em><\/figcaption><\/figure>\n<h2>Step 6: Negotiate The LOI And Purchase-Price Allocation<\/h2>\n<p>The <a href=\"https:\/\/www.ada.org\/\" target=\"_blank\" rel=\"noindex nofollow\">letter of intent (LOI)<\/a> frames the entire deal. A well-negotiated LOI can protect the seller&#8217;s interests, while a weak one often becomes the baseline from which the buyer&#8217;s attorneys seek concessions during due diligence.<\/p>\n<p>Because the LOI becomes the baseline for every later negotiation, each item it locks in is one the buyer&#8217;s attorneys are less likely to reopen during due diligence. At minimum, it should cover:<\/p>\n<ul>\n<li>Purchase price and assets included<\/li>\n<li>Allocation of goodwill, equipment, and accounts receivable<\/li>\n<li>Financing contingency and timeline<\/li>\n<li>Lease assignment terms<\/li>\n<li>Seller employment or work-back terms<\/li>\n<li>Non-compete scope and duration<\/li>\n<li>Closing date and earnest money<\/li>\n<li>Due diligence period and exclusivity window<\/li>\n<\/ul>\n<p>Once the LOI is signed, the next critical negotiation is <strong>purchase-price allocation<\/strong>, which describes how the total price is divided across asset classes such as equipment, goodwill, and the non-compete agreement. This allocation can directly influence the seller&#8217;s tax bill.<\/p>\n<p>Under IRC Section 1060, the purchase price in a dental practice asset sale must be allocated across seven statutory asset classes and reported consistently by both buyer and seller on IRS Form 8594. The tax treatment differs significantly by class:<\/p>\n<ul>\n<li><strong>Goodwill (Class VII)<\/strong> is generally taxed to the seller at long-term capital gains rates, which are typically more favorable than ordinary income rates. Most dentists selling a practice will face a combined federal capital gains rate of approximately 23.8% on goodwill proceeds (20% long-term capital gains rate plus 3.8% Net Investment Income Tax for higher earners).<\/li>\n<li><strong>Equipment (Class V)<\/strong> produces ordinary income to the seller up to the amount of prior depreciation taken, a rule known as IRC Section 1245 recapture, which can be taxed at rates up to 37%.<\/li>\n<li><strong>Non-compete agreements (Class VI)<\/strong> are taxed as ordinary income to the seller regardless of how the payment is labeled. A $200,000 non-compete allocation at a 37% marginal rate costs approximately $74,000 in federal tax, while the same $200,000 allocated to goodwill at a 23.8% combined rate costs approximately $47,600, a $26,400 difference on a single line item.<\/li>\n<\/ul>\n<p>Buyers and sellers often have different preferences in this negotiation. Buyers generally prefer more allocation to equipment for faster depreciation deductions, while sellers generally prefer more allocation to goodwill for more favorable capital gains treatment. Both parties must file matching Form 8594 allocations; mismatched filings are a known audit trigger.<\/p>\n<p>This section is education, not tax advice. Every seller should involve a dental CPA in the purchase-price allocation negotiation before signing the APA. McLerran negotiates the LOI on the owner&#8217;s behalf and structures terms that can protect the seller&#8217;s interests, including flagging allocation issues before they become expensive surprises.<\/p>\n<h2>Step 7: Plan The Transition And Work-Back<\/h2>\n<p>The work-back often functions as both a lender requirement and a practical bridge for patients and staff, and its structure can affect financing and post-close income.<\/p>\n<p>The three realistic work-back options are:<\/p>\n<ul>\n<li><strong>Short walk-away (roughly 4\u20138 weeks).<\/strong> The seller introduces the buyer to patients and staff, manages unfinished cases, and exits. This is most common in single-doctor practices where the buyer is ready to assume full production immediately and the lender is comfortable with the practice&#8217;s transferability metrics.<\/li>\n<li><strong>6\u201312 month associate contract.<\/strong> The seller continues working at a production split, supporting patient continuity and insurance recredentialing. Most dental practice sales include the seller staying on as an associate for 6\u201324 months post-close at an agreed production split, typically 30\u201340% of production to the seller. This structure is common when the selling dentist generates a significant share of collections or when the practice has complex cases in progress.<\/li>\n<li><strong>Longer vest-out (partnership structure).<\/strong> The seller sells a partial interest now and remains a clinical partner for several years while the buyer builds equity. This structure fits practices that can support 2 or more doctors and sellers who want to reduce ownership risk while staying productive.<\/li>\n<\/ul>\n<p>The right work-back depends on 3 factors: the buyer&#8217;s financing, patient continuity needs, and the seller&#8217;s own timeline and income goals. Lenders may require a documented transition period when the practice&#8217;s transferability metrics depend on the seller&#8217;s continued presence.<\/p>\n<p>Patient and staff introductions, records transfer, and the handling of unfinished cases all belong in the APA or a separate transition agreement, because the work-back only succeeds when those details are settled in writing. That is also why the right buyer matters as much as the right price. A buyer who will protect the practice&#8217;s legacy, patients, and staff represents half of the mandate.<\/p>\n<h2>Step 8: Close With An Advocate On Your Side<\/h2>\n<p>A dental practice sale can be fragile and may fail at several points, including due diligence, lender underwriting, lease assignment, or final document negotiation. An experienced advisor who manages each stage can increase the probability of closing.<\/p>\n<p>Do-it-yourself close rates run as low as 15\u201320%. McLerran &amp; Associates reports that roughly 85\u201390% of its clients transact, versus an industry norm closer to 35\u201340%. That gap reflects preparation, process, and representation.<\/p>\n<p>Because McLerran is sell-side only and never represents the buyer, its incentives stay aligned with the selling dentist at every stage. That same independence lets the firm work the private-buyer and DSO paths in roughly equal measure, so an owner can see a true side-by-side comparison instead of a guess from an advisor who knows only one lane.<\/p>\n<p>The firm\u2019s track record includes roughly 2,000 successful practice sales, approximately $2 billion in closed transaction volume, and more than 100 years of collective dental-industry experience across a team of former investment bankers, practice-finance lenders, DSO buyers, CPAs, and advisors.<\/p>\n<figure style=\"text-align: center;\"><img src=\"https:\/\/cdn.aigrowthmarketer.co\/1782231776232-426cf610db07.jpeg\" alt=\"A chat at McLerran &amp; Associates: the dental-specific sell-side advisor and advocate for practice owners guides on how, when, and to whom to sell your practice.\" style=\"max-height: 500px;\" loading=\"lazy\" decoding=\"async\"><figcaption><em>A chat at McLerran &amp; Associates: the dental-specific sell-side advisor and advocate for practice owners guides on how, when, and to whom to sell your practice.<\/em><\/figcaption><\/figure>\n<p><a href=\"https:\/\/dentaltransitions.com\/contact-us\/\" class=\"solid-button\" target=\"_blank\">Explore how a sell-side advocate can support your transition.<\/a><\/p>\n<h2>Selling To Another Dentist Versus Selling To A DSO<\/h2>\n<p>Doctor-to-doctor and DSO paths can fit different practice profiles. Smaller premier practices, commonly in the $1\u20131.5 million revenue range, often align well with a doctor-to-doctor sale. The largest practices tend to point toward the DSO path. Owners in the roughly $1.5\u20133 million revenue middle can often pursue either path, and the right answer can depend on specific financials, goals, and timeline. Because McLerran works both paths in roughly equal measure, it can produce a side-by-side valuation that quantifies a practice&#8217;s worth in both markets so the owner can choose with fuller information.<\/p>\n<h2>Frequently Asked Questions<\/h2>\n<h3>How Much Is A Dental Practice Worth To Sell?<\/h3>\n<p>Doctor-to-doctor deals commonly use 2 methods: a percentage of the practice&#8217;s trailing 12-month gross collections and a multiple of net cash flow or EBITDA. The percentage-of-collections method typically produces a range rather than a fixed number, with the actual figure moving based on overhead, payer mix, owner-dependence, collections trend, and location. The EBITDA multiple method focuses on profitability, so 2 practices with identical collections can be worth materially different amounts if one runs significantly lower overhead than the other. Specialty, practice size, and the strength of the buyer pool also influence where a practice lands within any given range. A CPA-led valuation built from your actual financial records can provide a more defensible answer than a rule of thumb or a free estimate.<\/p>\n<h3>Is It Hard To Sell A Dental Practice?<\/h3>\n<p>The process can be fragile and may collapse at multiple points, including lender underwriting, due diligence, lease assignment, or final document negotiation. As noted earlier, do-it-yourself close rates run as low as 15\u201320%, while a well-run brokered process transacts far more often. Common failure points include a valuation that does not hold up under scrutiny, a buyer who cannot secure financing at the agreed price, and a seller who is unprepared for the document demands of due diligence. Preparation, especially building a financeable, diligence-grade practice before it goes to market, can separate a successful close from a deal that falls apart.<\/p>\n<h3>How Long Does A Doctor-To-Doctor Sale Take?<\/h3>\n<p>A typical dental practice sale runs 6 to 12 months from first conversation to closing, and private doctor-to-doctor sales to individual buyers are often faster, sometimes closing in 4 to 8 months, though the timeline can compress or extend. A buyer who is pre-qualified with a lender before the LOI is signed, a complete and well-organized document package, and a lease with a straightforward assignment provision can shorten the process. Lender underwriting delays, such as <a href=\"https:\/\/baystreetlending.com\/lending-resources\/sba-loans-for-dental-practice-acquisition\" target=\"_blank\" rel=\"noindex nofollow\">SBA processing at a generalist bank that can take 90\u2013120 days<\/a>, insurance recredentialing gaps, and document deficiencies that surface during due diligence can extend it.<\/p>\n<h3>What Documents Will The Buyer\u2019s Lender Require?<\/h3>\n<p>Lenders underwriting a dental practice acquisition typically require:<\/p>\n<ul>\n<li>Three to five years of business tax returns<\/li>\n<li>Profit and loss statements and current-year year-to-date financials<\/li>\n<li>Production and hygiene reports broken out by provider<\/li>\n<li>Active patient count and new-patient metrics<\/li>\n<li>An accounts receivable aging report<\/li>\n<li>The office lease with remaining term and assignment provisions<\/li>\n<li>An equipment list<\/li>\n<li>Existing debt schedules<\/li>\n<\/ul>\n<p>The buyer will also need to provide personal financial statements, personal tax returns, and proof of the equity injection. Assembling this package before the practice is shown, rather than scrambling during due diligence, can make a deal more financeable.<\/p>\n<h3>Do I Have To Work Back After Closing?<\/h3>\n<p>Most doctor-to-doctor sales include some level of work-back, though the length varies. A short walk-away of roughly 4\u20138 weeks often fits single-doctor practices where the buyer assumes full production immediately. A 6\u201312 month associate contract can fit situations where the selling dentist generates a significant share of collections or where insurance recredentialing requires continuity. A longer vest-out applies in partnership structures where the seller remains a clinical partner for several years. The buyer&#8217;s financing often shapes the choice, because lenders may require a documented transition period when the practice&#8217;s transferability metrics depend on the seller&#8217;s continued presence.<\/p>\n<h3>How Is Confidentiality Protected During The Sale?<\/h3>\n<p>The standard posture is NDA-first: no financial documents, no production reports, and no identifying information are shared until a prospective buyer has signed a confidentiality agreement. Staff and patients typically are not informed until the deal is real, because premature disclosure can destabilize the practice and reduce its value. Marketing usually runs through channels that do not expose the practice publicly, such as dental association networks, confidential marketplaces, and direct outreach to pre-qualified buyers. Confidential showings are often scheduled after business hours to avoid staff or patient awareness.<\/p>\n<h3>How Does Purchase-Price Allocation Affect My Taxes?<\/h3>\n<p>The total purchase price in a dental practice asset sale is divided across asset classes such as goodwill, equipment, non-compete, and supplies, and each class is taxed differently. Goodwill generally qualifies for long-term capital gains treatment, which is typically more favorable than ordinary income rates. Equipment can trigger depreciation recapture, taxed as ordinary income up to the amount of prior depreciation taken. Non-compete payments are generally taxed as ordinary income to the seller. Because the allocation is negotiated as part of the purchase agreement, and both buyer and seller must file matching IRS Form 8594, the seller should involve a dental CPA in this negotiation before signing. This section is education, not tax advice, so consult your own advisors for guidance specific to your situation.<\/p>\n<h3>When Should I Delay The Sale?<\/h3>\n<p>A practice that is not ready for market may struggle to attract a qualified buyer, may fail lender underwriting, or may get re-traded to a lower price during due diligence. Signals that a practice may benefit from preparation before going to market include:<\/p>\n<ul>\n<li>Declining collections over the trailing two to three years<\/li>\n<li>An owner who generates the vast majority of clinical production with no associate support<\/li>\n<li>A lease with fewer than five years remaining and no renewal option, which can suppress valuation or require landlord participation to address<\/li>\n<li>Incomplete or inconsistent financial records<\/li>\n<\/ul>\n<p>Preparing before going to market can allow improvements in profitability, associate coverage, and documentation to flow directly into the eventual sale price.<\/p>\n<p><a href=\"https:\/\/dentaltransitions.com\/contact-us\/\" class=\"solid-button\" target=\"_blank\">Discuss whether your practice is ready for market.<\/a><\/p>\n<h2>Conclusion: Prepare A Financeable Practice, Not Just A Listing<\/h2>\n<p>A doctor-to-doctor dental practice sale ultimately depends on what the buyer&#8217;s bank believes the practice can support. The work that shapes that view, including the valuation, document package, lender preparation, confidential marketing, LOI negotiation, and purchase-price allocation, happens before the practice is widely shown.<\/p>\n<p>Sellers who prepare a financeable, defensible practice before going to market can close more often, at stronger prices, and with fewer surprises. Sellers who focus only on a listing often discover the lender&#8217;s view of value late in the process, when leverage to adjust terms has narrowed.<\/p>\n<p>McLerran &amp; Associates is a dental-only, sell-side advisor and advocate focused on making a practice financeable and defensible. With roughly 2,000 successful practice sales, approximately $2 billion in closed transaction volume, and more than 10,000 practices evaluated, the firm brings experience and process to a once-in-a-career decision. The right buyer, one who will protect the practice&#8217;s legacy, patients, and staff, can matter as much as the final price.<\/p>\n<p><a href=\"https:\/\/dentaltransitions.com\/contact-us\/\" class=\"solid-button\" target=\"_blank\">Plan your next steps with a confidential discovery call.<\/a><\/p>\n<section data-read-next=\"true\">\n<h2>Read Next<\/h2>\n<ul>\n<li><a href=\"https:\/\/dentaltransitions.com\/articles\/sell-dental-practice-to-dentist\" target=\"_blank\">How to Sell Your Dental Practice to Another Dentist<\/a><\/li>\n<li><a href=\"https:\/\/dentaltransitions.com\/articles\/how-to-sell-dental-practice\" target=\"_blank\">How to Sell Your Dental Practice: A Step-by-Step Guide<\/a><\/li>\n<li><a href=\"https:\/\/dentaltransitions.com\/articles\/steps-to-sell-dental-practice\" target=\"_blank\">How to Sell a Dental Practice: A Step-by-Step Guide<\/a><\/li>\n<li><a href=\"https:\/\/dentaltransitions.com\/articles\/sell-dental-practice-without-broker\" target=\"_blank\">How to Sell Your Dental Practice: A 6-Step Guide<\/a><\/li>\n<li><a href=\"https:\/\/dentaltransitions.com\/articles\/doctor-to-doctor-dental-transition\" target=\"_blank\">Doctor-to-Doctor Dental Transition: A Premier Guide<\/a><\/li>\n<\/ul>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Planning a doctor-to-doctor sale? McLerran &#038; Associates helps you value, market, and close your dental practice with confidence. Talk to us today.<\/p>\n","protected":false},"author":1,"featured_media":401,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-398","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts\/398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/comments?post=398"}],"version-history":[{"count":1,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts\/398\/revisions"}],"predecessor-version":[{"id":402,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts\/398\/revisions\/402"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/media\/401"}],"wp:attachment":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/media?parent=398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/categories?post=398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/tags?post=398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}