Business Sale Tax
Understand tax implications of selling your business and strategies to minimize tax burden
💸Tax Impact When Selling Business
Capital Gains Tax
On profit from sale
State Taxes
Varies by location
Additional Costs
Professional fees, etc.
Critical Importance!
Tax planning should start 6-12 months before selling to take advantage of various tax deductions and strategies
📊Types of Taxes Related to Business Sale
Capital Gains Tax
Tax Rate: 15-25%
Calculated on profit from sale
Ordinary Income Tax
Tax Rate: Varies
On certain portions of the sale
Strategy: Structure sale to minimize ordinary income portions
State Taxes
Tax Rate: 0-13%+
Varies by state
Consider state residence for tax optimization
Additional Considerations
Various Rates
Net Investment Income Tax, etc.
• Net Investment Income Tax (3.8%)
• Section 1202 qualified small business stock
• Installment sale treatment
💡Tax Reduction Strategies
🎯 Effective Tax Reduction Strategies
📊Structural Planning
- • Asset vs. Stock Sale Structure
- • Installment Sale Treatment
- • Charitable Remainder Trusts
⏰Timing Strategies
- • Sell in low-income years
- • Spread payments over multiple years
- • Utilize loss carryforwards
📋Deduction Maximization
- • Transaction costs
- • Advisory and broker fees
- • Investment banking fees
🎁Special Incentives
- • Section 1202 exclusion (up to $10M)
- • Opportunity Zone investments
- • Business combination structures
🧮Tax Calculation Example
Case: $20 Million Business Sale
❌ No Tax Planning
✅ With Tax Planning
Tax Savings: $1,000,000 (40% reduction)
Need Tax Planning Advice?
Consult tax experts specializing in business sales and tax reduction strategies
📝Summary & Recommendations
✅ Should Do
- • Plan taxes 6-12 months in advance
- • Use professional tax advisors
- • Keep complete documentation
- • Consider optimal sale structure
❌ Should Not Do
- • Avoid taxes illegally
- • Rush without planning
- • Hide information from IRS
- • Go without expert consultation