The Tax Impact of Selling Your Business
When selling a business, the structure of the transaction can have a meaningful impact on after-tax proceeds. While many founders focus on purchase price, factors such as entity type, asset mix, and deal structure often play an equally important role in determining outcomes.
In this infographic, developed in collaboration with RubinBrown, we break down key tax considerations that founders should understand early in the process.
Key topics include:
- Asset sale vs. stock sale: how structure affects taxation and allocation of value
- Capital gains vs. ordinary income: how different components of a transaction are taxed
- Legal structure vs. tax treatment: why a deal’s legal form may not reflect its tax outcome
- Entity-specific considerations: including S corporations, partnerships/LLCs, and C corporations
- Buyer and seller alignment: how structure impacts both sides of a transaction
The same purchase price can produce very different after-tax results depending on how a deal is structured. Small differences in basis, asset allocation, and state footprint can materially change outcomes.
Understanding these dynamics early can help founders evaluate options, align with buyers, and make more informed decisions throughout the transaction process.
Download a PDF version of this infographic here.
