The 1986 Revenue Reform Act did much to reduce the battle between a buyer and seller of a business. The act simultaneously eliminated the huge net capital gains preference and by IRC Section 1060, set requirements on the way the purchase price wold be allocated. Section 1060 likewise mandated agreement between the buyer and seller on that allocation.
The choice on allocating purchase price to assets is now based on fair market value and according to Section 1060 is in this order: CASH, MARKETABLE SECURITIES and ALL OTHER TANGIBLE ASSETS ACQUIRED. If there were any remaining purchase price it would then go to Section 179 assets - the intangibles. Section 179 would include contracts not to compete, goodwill, client list, etc. All Section 179 assets are amortized over a fifteen-year period. Obviously, one wants to be reasonably aggressive in allocating the purchase price to the tangible assets acquired.
However, not withstanding IRC Sections 1060 and 197, there still is room for some tax planning in the purchase process. This could be appealing to a selling owner as well, if a portion of the selling price was paid as compensation. In lieu of paying the selling owner as a salaried individual, consider paying the selling owner as a consultant/contractor (1099). Assuming, the selling owner had already reached the maximum contribution to social security, the selling owner could also fund a significant retirement plan.