Understanding the tax implications of selling your business, regardless of major D.C. issues, is critical, regardless of selling to an outside party, an employee(s), or “gifting” the company to family. What kinds of taxes should you be considerate of at this time?

Three primary tax implications come into play when selling. The sale of a business takes issue with income taxes on not just the business, but also personal income taxes. You’ll likely be dealing with ownership transfer taxes and estate taxes as well.

Likely, the most complex and challenging of these for you in selling your business, is the business transfer tax. While you won’t need to become an expert by any stretch, in order to minimize the tax burden, there are numerous nuances of which you’ll want at least a cursory understanding.

As a part of your overall exit plan, tax planning may involve coordination of your current advisory experts such as your wealth planner, attorney(s), and accountants. For a head start, you can consult this SBA article on 7 strategies to consider when selling a business. 

Conditions today are strong for selling your business. If things continue as expected and the M&A rebound stays the course, you have more reason now than ever to get your exit plan in place before the tides shift.

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