{"id":225606,"date":"2023-10-11T16:50:25","date_gmt":"2023-10-11T16:50:25","guid":{"rendered":"https:\/\/www.markperlbergcpa.com\/?p=225606"},"modified":"2023-10-11T17:03:24","modified_gmt":"2023-10-11T17:03:24","slug":"i-dont-want-to-pay-capital-gains-tax-when-i-sell-my-business","status":"publish","type":"post","link":"https:\/\/prosperlcpa.com\/blog\/2023\/10\/i-dont-want-to-pay-capital-gains-tax-when-i-sell-my-business\/","title":{"rendered":"I Don\u2019t Want To Pay Capital Gains Tax When I Sell My Business!"},"content":{"rendered":"<p class=\"p1\">You\u2019ve worked hard during the last few decades building and maintaining your business, and now it\u2019s time to sell it off, relax and enjoy the fruits of your labors. You don\u2019t want those years of work going up in smoke through <b>long term capital gains taxes<\/b> on the sale, though. What\u2019s a business owner to do?<\/p>\n<p class=\"p2\">You will be subject to a capital gains tax rate of, currently, 0%, 15% and 20, (depending on income) if your business is older than 12 months. Plus, assets, like inventory or accounts receivable will be taxed as ordinary income rather than capital gains.<span class=\"Apple-converted-space\">\u00a0 <\/span>Here are options for lowering the <b>long-term capital gains tax<\/b>:<\/p>\n<ul class=\"ul1\">\n<li class=\"li3\"><span class=\"s2\"><b>Installment Sale:\u00a0<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Sell in phases through a schedule of annual payments to spread out your tax liability.<span class=\"Apple-converted-space\">\u00a0 <\/span>This strategy can also prove attractive to a buyer. <\/span><\/li>\n<li class=\"li3\"><span class=\"s2\"><b>Strategic Planning and Negotiation: <\/b>You and your buyer have competing interests. The IRS rules favor allocating more of the price to capital assets rather than depreciating assets so take the time to plan most favorable allocation.<\/span><\/li>\n<li class=\"li3\"><span class=\"s2\"><b>Tax Loss Creation:<\/b> Consider strategies, investment vehicles and financial structures that will create tax losses to offset the capital gain. Also consider any potential losses that can be generated by current assets. <\/span><\/li>\n<li class=\"li3\"><span class=\"s2\"><b>Entity Structuring and Shifting: <\/b>Collaborate with a tax advisor and attorney to explore moving the business into another entity structure that can create charitable tax deductions or deferrals of income before the sale. <\/span><\/li>\n<li class=\"li3\"><span class=\"s2\"><b>Employee Buy-out:\u00a0<\/b>C-Corp owners may have the option to bypass finding a buyer, selling the business to employees and. and thereby minimizing capital gains tax. This requires an\u00a0<a href=\"https:\/\/smartasset.com\/retirement\/esop\" target=\"_blank\" rel=\"noopener\">employee stock ownership plan (ESOP)<\/a>.\u00a0 Sale proceeds can be rolled into an investment plan to defer capital gains taxes. <\/span><\/li>\n<li class=\"li4\"><span class=\"s2\"><b>Explore Opportunity Zone reinvestment.\u00a0<\/b>Business owners can defer capital gains through December 31, 2026, by reinvesting capital gains from the sale of a business into an Opportunity Zone if reinvested within 180 days of the sale. To qualify for this tax break, any capital gains must be reinvested within 180 days of the sale. This enables deferred payment.<\/span><\/li>\n<\/ul>\n<p class=\"p6\"><span class=\"s3\">*Learn More! <b>Checkout <\/b><a href=\"https:\/\/youtu.be\/hqcY_6v_XUM\" target=\"_blank\" rel=\"noopener\"><span class=\"s4\">EP 038 &#8211; Strategic Business Expansion, Capital Gains &amp; Exit Planning with Austin Peterson<span class=\"Apple-converted-space\">\u00a0 <\/span><\/span><span class=\"s5\"><b> <\/b> where we discuss structuring businesses for future capital gains events, and leveraging qualified opportunity zones. <\/span><\/a><\/span><\/p>\n<p class=\"p7\">Exceptional results require exceptional skill and planning. We can help. <b>You\u2019re welcome to take advantage of a free discovery session, which starts with an intro call <\/b><a href=\"https:\/\/calendly.com\/corbette\/15-minute-prospect-intro-call\" target=\"_blank\" rel=\"noopener\"><span class=\"s6\"><b>HERE<\/b><\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>You\u2019ve worked hard during the last few decades building and maintaining your business, and now it\u2019s time to sell it off, relax and enjoy the fruits of your labors. You don\u2019t want those years of work going up in smoke through long term capital gains taxes on the sale, though. What\u2019s a business owner to do? You will be subject to a capital gains tax rate of, currently, 0%, 15%&#8230; <a class=\"more-link\" href=\"https:\/\/prosperlcpa.com\/blog\/2023\/10\/i-dont-want-to-pay-capital-gains-tax-when-i-sell-my-business\/\">Read More<a><\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[],"tags":[],"class_list":{"0":"post-225606","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"entry"},"_links":{"self":[{"href":"https:\/\/prosperlcpa.com\/blog\/wp-json\/wp\/v2\/posts\/225606","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prosperlcpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prosperlcpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prosperlcpa.com\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/prosperlcpa.com\/blog\/wp-json\/wp\/v2\/comments?post=225606"}],"version-history":[{"count":0,"href":"https:\/\/prosperlcpa.com\/blog\/wp-json\/wp\/v2\/posts\/225606\/revisions"}],"wp:attachment":[{"href":"https:\/\/prosperlcpa.com\/blog\/wp-json\/wp\/v2\/media?parent=225606"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prosperlcpa.com\/blog\/wp-json\/wp\/v2\/categories?post=225606"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prosperlcpa.com\/blog\/wp-json\/wp\/v2\/tags?post=225606"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}