What will you actually take home?

These are estimates only - designed to give you a general understanding of potential proceeds. Our calculator uses current federal and state tax rates for long-term capital gains.

Your actual results will vary based on many factors including:

• Depreciation recapture (especially for real estate-heavy businesses)
• Net Investment Income Tax (NIIT) - additional 3.8% for high earners
• Alternative Minimum Tax (AMT) considerations
• State-specific rules and deductions
• Deal structure (asset vs. stock sale)
• Your complete tax situation for the year

Always consult with qualified tax and legal professionals before making any financial decisions. This calculator is for educational and planning purposes only.

Capital gains tax is the tax on profit from selling an asset. For business sales, it's calculated as the difference between your sale price and your original cost basis (what you paid to acquire or build the business).

Long-term capital gains (assets held for more than one year) are taxed at preferential rates of 0%, 15%, or 20% at the federal level, depending on your income. Short-term gains (held less than one year) are taxed as ordinary income. You typically pay capital gains tax in the year you complete the sale.

Yes, there are several strategies to potentially reduce your tax burden:

• Opportunity Zone Investment: Defer and reduce capital gains by investing in qualified opportunity zone funds
• Installment Sale: Spread the gain over multiple years to potentially stay in lower tax brackets
• QSBS Exclusion (Section 1202): C-corporation businesses may exclude up to $10,000,000 in gains if specific requirements are met
• Timing: Consider the timing of your sale relative to your other income
• Asset vs Stock Sale: Structure the deal to optimize tax treatment
• Charitable Giving: Donate appreciated assets to offset gains

Important: Each strategy has specific requirements and may not apply to your situation. Consult with a qualified tax advisor to explore which strategies work for you.

Legal and closing costs typically include:

• Attorney fees for transaction documentation and negotiation
• Due diligence costs (accounting, legal review)
• Escrow and title services
• Business valuation reports
• Filing fees and document preparation

These costs typically range from 1-3% of the sale price for percentage-based structures, or $15,000-$50,000+ for flat fee arrangements, depending on deal complexity.

Seller financing reduces your cash at closing but can offer several benefits:

• Tax Deferral: With an installment sale, you pay taxes only as you receive payments
• Interest Income: Earn interest on the financed portion
• Higher Sale Price: Buyers may pay more when financing is available
• Easier Deal: Makes your business more attractive to buyers

However, you take on risk that the buyer will successfully repay. Secure the note with business assets and consult with legal and tax advisors.

Important: 1031 exchanges generally only apply to real estate, not to business sales.

After the 2017 Tax Cuts and Jobs Act, 1031 exchanges are limited to real property (real estate) transactions. If your business owns significant real estate, that portion might qualify for a 1031 exchange, but the business goodwill, inventory, equipment, and other assets typically do not.

Alternative for business sales: Consider Opportunity Zone investments or installment sales to defer capital gains from business sales.

Always consult with a qualified tax advisor about your specific situation. If your business includes real estate, discuss whether a partial 1031 exchange might apply to that portion of the sale.

Generally, you pay state capital gains tax based on your state of residence at the time of the sale. Moving to a tax-friendly state before selling can potentially save you significant money.

However, states have different rules about:

• How long you must be a resident before the sale
• Whether they can tax income from businesses operated in their state
• Source income rules for businesses with operations in multiple states

If you're considering relocating to reduce taxes, consult with a tax advisor who understands multi-state taxation at least 12-18 months before your planned sale.

An installment sale is when you receive payment for your business over multiple years instead of a lump sum. This can provide significant tax benefits by spreading your capital gain across multiple tax years.

Benefits include:

• Pay taxes only as you receive payments (tax deferral)
• Potentially stay in lower tax brackets each year
• Earn interest on the outstanding balance
• Make your business more attractive to buyers

The IRS has specific rules for installment sales. You'll report each payment's gain proportionally. Work with a tax professional to structure it correctly and ensure proper documentation.

Yes, entity structure significantly impacts your tax burden.

Pass-Through Entities (S-Corp, LLC, Partnership): Most online and small businesses use these structures. Profits "pass through" to owners and are taxed once at individual rates. This calculator assumes a pass-through entity.

C-Corporations: Face potential double taxation - once at the corporate level (21% federal) and again when distributed to shareholders. However, C-Corps may qualify for QSBS (Section 1202) exclusion of up to $10,000,000 in gains if specific requirements are met.

If you're selling a C-Corp or considering changing entity structure before a sale, consult with a tax advisor at least 12 months before the transaction.

Asset Sale (Most Common for Businesses): The buyer purchases specific business assets (inventory, customer lists, intellectual property, equipment). Each asset category may have different tax treatment:

• Goodwill and intangibles: Capital gains rates (favorable)
• Inventory: Ordinary income rates (higher)
• Depreciated equipment: May trigger depreciation recapture

Stock Sale: The buyer purchases ownership shares. Generally simpler for tax purposes as everything is treated as capital gain, but buyers often prefer asset sales for liability protection.

Most business sales are structured as asset sales. This calculator assumes an asset sale weighted toward capital gains treatment. Your actual allocation should be documented in the purchase agreement.

If you've claimed depreciation on business assets (equipment, vehicles, buildings), you may owe depreciation recapture tax when you sell. This applies to asset sales where depreciated property is included.

How it works: Depreciation you claimed is "recaptured" and taxed as ordinary income (up to 25% for real estate, up to 37% for equipment) instead of the favorable capital gains rates.

Example: You bought equipment for $100,000, claimed $60,000 in depreciation, and sell it for $80,000. The $60,000 depreciation recapture is taxed as ordinary income, not capital gains.

This calculator does not include depreciation recapture calculations. For asset-heavy businesses or those with significant real estate, work with a CPA to calculate the recapture impact - it can be substantial.