What are add-backs, and which ones should you challenge?

Add-backs are expenses a seller argues should be added back to profit because they will not continue under new ownership. They raise adjusted earnings, and since price is a multiple of earnings, every add-back a buyer accepts raises what they pay. Commonly legitimate: genuine one-time legal costs, a single relocation, owner compensation above market where you will not replace it at that level. Commonly contested: marketing described as discretionary that is actually driving revenue, deferred maintenance that you will have to fund anyway, family members on payroll doing real work, and personal expenses so entangled with the business that removing them changes how it operates. The test is simple and worth applying to every line: does this cost genuinely disappear the day you take over, or does it just move? If it moves, it is not an add-back.