PAUL H. GRAHAM
← All GuidesHow much tax do I actually pay when I sell my business?
There's no single number, because the tax bill on a sale depends almost entirely on how the deal is structured, not just the sale price. A stock sale, an asset sale, and an installment sale can each produce a very different outcome on the same business at the same valuation.
Most owners start planning for the sale itself and treat the tax bill as something to calculate afterward. That order is backwards. The structure of the deal, whether it's an asset purchase or a stock purchase, whether payments come as a lump sum or over several years, whether some of the proceeds roll into a new entity, all of it shapes what actually reaches your bank account.
Federal capital gains rates are only the starting point. State taxes, depreciation recapture, and the treatment of goodwill can each move the real number by a meaningful margin. None of this shows up on the letter of intent. It shows up in the closing statement, usually after the terms are already locked in.
The owners who keep the most of what they built are the ones who bring a tax strategist into the conversation before the deal is negotiated, not after it's signed. By the time a buyer is at the table, most of the best options are already off it.
See where you actually stand
Fifteen minutes, straight answers, no obligation. Start with the training or join the next live call.