Planning for the sale of your business is an exciting experience. You have spent years building a successful enterprise. Now you feel the time is right to reap the rewards of your efforts. As you start through the process, much of the emphasis will be on the value of the business and determining what you will realize from the sale.
While the resulting tax is a concern to most sellers, many mistakenly put this topic aside, assuming the tax bill will be an after-sale responsibility. This is a simple mistake that has cost sellers hundreds of thousands of dollars. Like the sale itself, implementing the proper tax strategy early in the process can increase the amount of money you realize by 25-40 percent.
The Internal Revenue Service expects you to pay your tax bill. However, they provide over a dozen alternatives for determining when, and how, you pay your tax obligation.
As examples:
- You can structure your sale to produce income while deferring tax
- You can structure your sale to receive your money in a tax-free form at closing and defer the tax for up to 30 years
- With a dynasty approach, you can create safe generational wealth transfer, and provide for philanthropic giving
The key is understanding that you have options. You want a tax expert who will work with you, your accountant and/or your tax attorney to design the approach which best meets you goals. Understanding your tax alternatives provides you with the information necessary to make an informed financial decision.
If you would like to discuss your tax options, please reach out to your One Accord representative, or contact me directly.
Start planning your tax strategy today. |
About the Author
Jack H. Gruber is a capital gains tax specialist. If you have questions or simply want to be better prepared for dealing with capital gains tax issues, contact him directly at jack.gruber@ja-maranalytics.com or (425) 365-7160.
