How to Sell a Business & Minimize Taxes: A Complete Guide

Selling your business is the financial equivalent of summiting Everest. You’ve spent years climbing, taking risks, and pouring everything you have into reaching the peak. But getting the highest sale price is only half the battle. The real challenge is the descent—getting your wealth safely off the mountain without losing a massive portion to the elements, or in this case, the IRS. Too many founders focus only on the final number, forgetting that their net proceeds are what truly matters. This guide is your roadmap for that descent. We’ll show you how to sell a business and minimize taxes by focusing on the strategic levers you can pull long before a deal is on the table.

Key Takeaways

• Plan Ahead to Control Your Tax Outcome

  : Your business structure is your most powerful tax lever, but strategic changes like converting to an S-corp or qualifying for the QSBS exemption require years of foresight to be effective.

• Focus on Deal Structure, Not Just the Final Price

  : An asset sale benefits the buyer's future taxes while a stock sale benefits yours. Understanding this fundamental conflict is a critical negotiation point that directly impacts how much you keep.

• Use Your Sale Proceeds to Defer Your Tax Bill

  : Your tax planning doesn't end when the deal closes. Use tools like Qualified Opportunity Zones and structured installment sales to postpone your tax liability and keep your capital compounding for you.

What Taxes Apply When You Sell Your Business?

Selling your business is one of the most significant financial events of your life. It’s the culmination of years of hard work and risk. But after the negotiations are done, a substantial portion of your proceeds can be lost to taxes if you don’t have a plan. The final sale price is just one part of the equation; understanding the tax implications is what determines how much you actually keep.

The primary tax you’ll face is on your capital gains, but the final bill is heavily influenced by the structure of the deal, your business entity, and even where you live. Getting these details right from the start is critical. It’s not about avoiding taxes, but about strategically managing them so you can preserve the wealth you’ve worked so hard to build. Let’s break down the key taxes you need to have on your radar.

Capital Gains 101

When you sell your business for more than your original investment (your “basis”), that profit is considered a capital gain. Assuming you’ve owned the business for more than a year, this profit will be taxed at the more favorable long-term capital gains rates, which are typically 0%, 15%, or 20% at the federal level. For most successful business owners, the 20% rate is the starting point.

On top of that, you’ll likely face the 3.8% Net Investment Income Tax (NIIT), which applies to investment income for individuals above certain income thresholds. Suddenly, you’re looking at a federal tax bill of nearly 24% on your profit before even considering state taxes.

How Valuation Impacts Your Tax Bill

The structure of your sale agreement has a massive impact on your tax outcome. The two most common ways to structure a deal are as an asset sale or a stock sale, and buyers and sellers almost always have competing interests.

In a stock sale, the buyer purchases your ownership shares directly. For you, the seller, this is usually ideal. It’s a clean transaction that typically results in a single layer of long-term capital gains tax. In an asset sale, the buyer purchases the company’s individual assets—like equipment and client lists. Buyers prefer this because it allows them to get future tax deductions. For you, however, this can trigger double taxation, especially in a C-corp. Understanding the difference between an asset and stock sale is fundamental to negotiating a tax-efficient exit.

Don't Forget State and Local Taxes

Your federal tax bill is only part of the story. Most states also tax capital gains, and some of these rates are substantial. For example, if you’re a business owner in California, you could pay an additional 13.3% in state income tax on your profit. That brings your combined federal and state tax rate to over 37%.

On the other hand, states like Florida, Texas, and Nevada have no state income tax, which can create a significant advantage. This is why your location is a critical component of a long-term exit strategy. A comprehensive plan must account for your complete state and local tax picture.

Why Your Business Structure Is Your Biggest Tax Lever

Most founders are laser-focused on growing their business—as they should be. But the legal structure you chose on day one might not be the best one for your exit. Your entity type isn't just a line item on a form; it's the single most powerful lever you can pull to influence your tax outcome when you sell. Making a strategic change years before a sale can be the difference between writing a seven-figure check to the IRS and reinvesting that capital into your next chapter. Thinking about this early is the first step toward a tax-efficient exit.

C-Corp vs. Pass-Through: The Tax Breakdown

Let's start with the basics. Your business is likely either a pass-through entity (like an S-corp, LLC, or partnership) or a C-corporation. In a pass-through structure, the business itself doesn't pay income tax; the profits "pass through" to you, and you pay the tax on your personal return. C-corps, on the other hand, are taxed at the corporate level, and you’re taxed again on dividends or salary.

This distinction becomes critical during a sale. Sellers typically prefer a stock sale, which is a straightforward transaction taxed as a capital gain. Buyers, however, often push for an asset sale because it allows them to get future tax write-offs. The right structure gives you more control over how the deal is framed and taxed.

When to Convert Your Structure Before a Sale

If your exit is on the horizon, it’s time to analyze if your current structure still serves you. Converting from one entity type to another can be a strategic move to reduce your tax liability, but it’s a move that requires foresight. For example, the sale of C-corp stock might subject you to the 3.8% Net Investment Income Tax (NIIT). However, if you operate as an S-corp and have been actively involved in the business, you can often avoid this extra tax.

This isn't a last-minute switch. The IRS has specific rules and holding periods you need to meet to get the full tax benefits of a conversion. Planning this transition one to five years before a potential sale is crucial.

Leverage Qualified Small Business Stock (QSBS)

For founders playing the long game, the Qualified Small Business Stock (QSBS) exemption is a potential game-changer. If your company is a C-corp and you meet certain criteria, Section 1202 of the tax code allows you to potentially exclude 100% of your federal capital gains from taxes upon selling your stock. The exclusion is capped at $10 million or 10 times your original investment, whichever is greater.

To qualify, you must have acquired the stock at its original issue from a domestic C-corp and held it for at least five years, among other requirements. This isn't a loophole you can jump into right before a sale. It requires that your business be structured as a C-corp from early on, making it one of the most powerful examples of how proactive tax planning shapes your ultimate financial outcome.

Plan Your Exit: Pre-Sale Tax Strategies

The most successful business exits are never an accident. They are the result of careful, deliberate planning that begins years before you even think about listing your company for sale. The moves you make in the 24 to 36 months leading up to a transaction can have a bigger impact on your net proceeds than the final sale price itself. Waiting until a letter of intent is on the table is waiting too long. At that point, your options are limited, and you’re forced to react rather than act.

Proactive planning allows you to shape the narrative, structure the deal on your terms, and legally minimize the tax bill that follows. It’s about treating your business exit not as a single event, but as the final, critical phase of your business strategy. By addressing your entity structure, cleaning up your financials, and timing the sale strategically, you can ensure the wealth you’ve worked so hard to build ends up in your pocket, not with the IRS. This is where you shift from being a business operator to a strategic wealth builder.

Restructure Your Entity for a Better Outcome

The legal structure you chose when you started your business is rarely the optimal one for selling it. Your entity type—whether it’s a C-corp, S-corp, or LLC—directly dictates how the proceeds are taxed. For instance, if your business is a C corporation, selling it could expose you to an extra 3.8% Net Investment Income Tax on your profit. However, if your business is an S corporation and you were actively involved, you can often avoid this extra tax.

Making a change, like converting from a C-corp to an S-corp, isn’t a quick fix. It comes with a five-year look-back period for certain built-in gains. This means you need to make the switch well in advance of a sale to reap the full benefits. Thinking about your entity structure early is one of the most powerful moves you can make to protect your proceeds.

Clean Up Your Balance Sheet

A buyer isn’t just purchasing your brand; they’re acquiring a collection of assets. How those assets are classified on your balance sheet has major tax consequences. When you sell a business, the IRS often treats it as if you're selling each asset individually. Some assets, like goodwill and intellectual property, generate long-term capital gains, which are taxed at preferential rates. Others, like inventory or accounts receivable, create ordinary income, which is taxed at your highest marginal rate.

Before you enter negotiations, work with an advisor to clean up your books. This means writing off bad debt, properly valuing inventory, and ensuring every asset is correctly categorized. By doing this work upfront, you can strategically influence the purchase price allocation in the final agreement, maximizing the portion of the sale that qualifies for lower capital gains treatment.

Time Your Sale for Maximum Advantage

The date on the sale agreement can be just as important as the dollar amount. Timing your exit strategically can open up powerful tax deferral opportunities. One of the most effective is the use of Qualified Opportunity Zones (QOZs). If you invest the capital gains from your business sale into a QOZ fund within 180 days, you can defer paying taxes on those gains until the end of 2026. This gives you years to let that capital work for you before the tax bill comes due.

Beyond specific programs, consider the broader economic and political climate. Are tax laws likely to change? Is your personal income for the year unusually high or low? Aligning the sale with these factors can prevent you from being unnecessarily pushed into a higher tax bracket and ensure you’re making the most of the current tax code.

Get Your Documentation in Order

Nothing kills a deal faster than disorganized financials and incomplete records. Before you even think of going to market, you need to have your house in order. This means having at least three to five years of pristine financial statements, organized tax returns, up-to-date corporate records (like meeting minutes and bylaws), and clear documentation for all key contracts, leases, and intellectual property. This preparation does more than just smooth out due diligence; it builds buyer confidence and reinforces the value of your business.

Selling a business is incredibly complex, and the tax implications can be overwhelming. This is not a DIY project. Assembling a team of expert tax, legal, and financial advisors early in the process is non-negotiable. They will ensure your documentation is flawless and that every decision is made with your end goal in mind: a clean, profitable, and tax-efficient exit.

Keep More of Your Money: Key Minimization Tactics

Once the deal is done, the last thing you want is to hand over an unnecessarily large chunk of your proceeds to the IRS. The good news is you don’t have to. With smart planning, you can use established, powerful strategies to significantly reduce the tax impact of your sale. These aren't obscure loopholes; they are intentional financial moves designed to help you preserve the wealth you’ve worked so hard to build.

Thinking beyond the transaction itself and looking at your entire financial picture—from investments to charitable goals to legacy planning—opens up a new set of tools. Let’s walk through four key tactics that can help you keep more of your money where it belongs: with you and your family.

Invest in Opportunity Zones

Imagine taking the profit from your business sale and reinvesting it in a way that delays your tax bill and could even eliminate taxes on future growth. That’s the power of a Qualified Opportunity Zone (QOZ). These are economically-distressed communities where the government encourages new investment through tax incentives.

If you roll your capital gains into a QOZ fund within 180 days of the sale, you can defer paying taxes on that gain until the end of 2026. The real magic happens if you hold that investment for at least 10 years—any appreciation on your QOZ investment itself can be completely tax-free. It’s a powerful way to put your capital back to work while minimizing your immediate tax hit.

Give Back (and Save) with Charitable Remainder Trusts

If philanthropy is part of your long-term plan, a Charitable Remainder Trust (CRT) is an elegant strategy that aligns your financial and personal goals. Instead of selling your business shares and then donating, you can place them directly into a CRT. This move allows you to sidestep the capital gains tax on those shares entirely.

Here’s how it works: The trust sells the shares tax-free, and in return, you receive an income stream for a set number of years. You also get an immediate charitable tax deduction for the year you fund the trust. When the trust term ends, the remaining assets go to the charity you’ve chosen. It’s a true win-win, letting you support a cause you love while creating significant tax advantages and a steady income for yourself.

Use Tax Loss Harvesting

Your business sale doesn't happen in a vacuum; it's part of your broader investment portfolio. Tax loss harvesting is a straightforward strategy that uses this to your advantage. The concept is simple: sell other investments in your portfolio that are currently at a loss to offset the massive gain from selling your business.

This is a practical way to balance the scales and reduce your total taxable income for the year. For example, if you have a $2 million capital gain from your business but $300,000 in losses from your stock portfolio, you can realize those losses to bring your taxable gain down to $1.7 million. It requires a coordinated look at all your assets, but it can make a substantial difference in your final tax bill.

Protect Assets with Family Limited Partnerships

For founders thinking about legacy and intergenerational wealth, a Family Limited Partnership (FLP) is a sophisticated tool for asset protection and tax-efficient wealth transfer. An FLP allows you to restructure your business assets, separating control from economic value. You can retain the general partner shares (which hold voting control) while gifting the limited partner shares (which hold most of the value) to your children or trusts over time.

This strategy can significantly reduce gift and estate taxes down the line, as the transferred shares may be eligible for valuation discounts. It’s a proactive way to pass your hard-earned wealth to the next generation while maintaining control over the business operations for as long as you see fit.

Structure the Deal to Win on Taxes

The final sale price is just one part of the equation. How you actually structure the transaction can have an even bigger impact on how much money you walk away with. Many business owners focus so intensely on negotiating the highest possible number that they overlook the deal terms that determine their tax liability. This is a massive, unforced error. Agreeing to a structure that favors the buyer from a tax perspective can easily wipe out the gains you fought so hard for at the negotiation table.

Thinking through the mechanics of the sale isn’t just about compliance; it’s about strategy. Will you sell the company’s assets or the company stock? How will you and the buyer allocate the purchase price across different parts of the business? Will you take a lump-sum payment or spread it out over time? Each of these decisions creates a different tax outcome. By understanding your options and building them into the negotiation from the start, you can proactively design a deal that serves your financial goals, not just the buyer’s. This is where you move from being a passive participant to the architect of your financial future.

Asset Sale vs. Stock Sale: What's the Difference?

This is one of the most fundamental decisions in any business sale. In an asset sale, the buyer purchases individual assets from your company—like equipment, inventory, and customer lists. In a stock sale, they buy the entire legal entity by purchasing its shares of stock. As the seller, you’ll almost always prefer a stock sale. It’s cleaner and generally results in a single layer of tax at lower long-term capital gains rates.

Buyers, on the other hand, typically push for an asset sale. This allows them to “step up” the basis of the assets they acquire, giving them larger depreciation write-offs in the future. This conflict creates a critical negotiation point. Don’t be surprised if a buyer offers a higher price for an asset sale—they’re essentially asking you to pay a higher tax bill so they can get a future tax break.

Allocate the Purchase Price Intelligently

If you agree to an asset sale, the next step is to allocate the total purchase price among the various assets being sold. This isn’t just an accounting exercise; it has direct tax consequences. The IRS views it as if you sold each item separately, and different assets are taxed at different rates. For example, gains from selling inventory are taxed as ordinary income (the highest rates), while gains from selling goodwill are typically taxed at lower capital gains rates.

You and the buyer must agree on this allocation and file identical forms with the IRS. A savvy buyer will try to allocate more of the price to assets they can depreciate quickly, like equipment. Your goal is to allocate as much as possible to assets that generate capital gains, like goodwill. This allocation should be a deliberate part of your negotiation strategy, not a last-minute detail.

Use Earn-Outs to Your Advantage

An earn-out is a deal structure where a portion of the sale price is paid out in the future, but only if the business achieves specific performance goals after the sale. While this introduces some risk—you’re not guaranteed the full payment—it can also create powerful tax planning opportunities. Because the payments are spread over time, you can defer the associated tax liability.

This deferral gives you time to implement other strategies. For instance, if you plan to move, you could potentially relocate to a state with no income tax before you receive the earn-out payments, significantly reducing your state tax bill. The key is to weigh the risk of the business underperforming against the potential tax benefits of spreading out your income over several years.

The Benefits of an Installment Sale

Similar to an earn-out, an installment sale allows you to receive payments from the buyer over a set period of years instead of in one lump sum. The key difference is that these payments are typically fixed and not tied to the company’s future performance. The primary advantage here is tax deferral. Instead of facing a massive tax bill in the year of the sale, you can spread the tax liability over the entire payment period.

This strategy can keep you out of the highest tax brackets and makes the financial impact much more manageable. It smooths out your income and gives you greater predictability as you plan your post-sale life. By structuring the sale this way, you can often increase your total after-tax proceeds simply by controlling the timing of your tax payments.

Defer Your Tax Bill: Advanced Methods

Minimizing your tax bill isn’t just about finding deductions; it’s about controlling the timeline. Why hand over a massive chunk of your sale proceeds to the IRS immediately when you could put that capital back to work? Tax deferral is one of the most powerful tools available to business owners, allowing you to postpone tax payments and use your pre-tax dollars to fund your next venture, investment, or wealth-building strategy. It’s the difference between letting your money compound for you versus letting it sit in government coffers.

These aren’t obscure loopholes. They are established, strategic provisions within the tax code designed for savvy investors and entrepreneurs. However, they require careful planning and precise execution. A misstep can invalidate the strategy and trigger the very tax bill you were trying to postpone. The key is to move from a reactive tax posture—paying whatever is due after the fact—to a proactive one where you structure the sale from day one with tax deferral in mind. This approach keeps you in control of your capital and your financial future.

Roll Over Gains with Section 1045

For founders and early investors, Section 1045 is a powerful tool for serial entrepreneurship. If you sell Qualified Small Business Stock (QSBS) that you’ve held for more than six months, you can defer the capital gains tax by reinvesting the proceeds into another QSBS-eligible company within 60 days. This allows you to chain your successes together, rolling capital from one successful exit directly into your next high-growth venture without losing a significant portion to taxes along the way. It’s a strategy that directly supports innovation and keeps your wealth-building momentum going strong.

Explore Your 1031 Exchange Options

You’ve likely heard of 1031 exchanges in the context of real estate, but their application can be broader. The core principle is simple: you can defer paying capital gains tax when you sell an asset by reinvesting the proceeds into a similar, or "like-kind," asset. This could apply if your business holds significant real estate or other qualifying assets. Instead of cashing out and paying taxes, you effectively swap one investment for another, allowing your original investment and its gains to continue growing tax-deferred. This provides a massive cash flow advantage, keeping your capital fully deployed and working for you.

Consider a Structured Installment Sale

A lump-sum payment from your business sale feels great until the tax bill arrives. A structured installment sale offers a compelling alternative. Instead of receiving all the cash at once, you receive payments over a predetermined number of years. This spreads your taxable income out over time, which can prevent you from being pushed into the highest tax bracket in the year of the sale. It transforms a single, massive tax event into a series of smaller, more manageable ones, giving you income predictability and greater control over your annual tax liability.

Manage the Risks of Deferral

Deferral strategies are powerful, but they aren't without risk. With an installment sale, you are extending credit to the buyer, which exposes you to their risk of default. This is why a structured installment sale is so critical. The buyer’s payments are typically used to purchase an annuity from a major life insurance company, which then makes the scheduled payments to you. This substitutes the buyer’s credit risk for that of a highly-rated insurer. Before agreeing to any such arrangement, it’s essential to vet the insurance company’s financial stability by checking its ratings from firms like A.M. Best or Moody’s.

Assemble Your A-Team for the Sale

Selling your business is one of the most significant financial events of your life. It’s not the time to rely on the same generalist advisors who’ve handled your annual tax filings or routine legal work. A successful, tax-efficient exit requires a specialized team of experts who understand the high-stakes environment of a business sale. Think of them as your personal board of directors, each with a specific role in maximizing your outcome. Your job is to be the CEO of the sale, and that starts with putting the right people in the right seats. This team will help you create a cohesive plan that aligns with your goals for the business, your wealth, and your family’s future.

Who You Need in Your Corner

Your exit team should be a curated group of specialists. At a minimum, you’ll need a tax advisor who specializes in transactions, a deal-savvy attorney, and a wealth manager. Your tax advisor is your strategic quarterback, ensuring every decision is made through a tax-minimization lens. A transaction attorney handles the legal mechanics of the deal, from the letter of intent to the final purchase agreement. A wealth manager helps you plan for life after the sale, structuring the proceeds to support your long-term financial freedom. You may also need an M&A advisor to market the business and negotiate terms.

How to Coordinate Your Advisors

Having a team of experts is one thing; making them work together is another. Siloed advice is a recipe for disaster. Your attorney might negotiate a great price, but if the deal structure creates a massive, unexpected tax bill, you haven’t won. The key is to establish a lead advisor—often your tax strategist—to coordinate the team. This person ensures the legal, financial, and tax strategies are aligned. Insist on regular, all-hands meetings where your advisors can collaborate and build a unified plan. As the U.S. Small Business Administration notes, you need experts to manage the intricate details.

Create Your Pre-Sale Timeline

The most expensive mistake you can make is waiting too long to plan your exit. The ideal time to start assembling your team and building a strategy is two to three years before you intend to sell. This gives you enough runway to make meaningful changes that can save you millions. You can restructure your entity, clean up your balance sheet, and get your personal financial house in order. For instance, you’ll want to ensure your estate plan is updated to handle the influx of capital from the sale. A proper timeline gives you control, allowing you to enter negotiations from a position of strength.

Life After the Sale: Long-Term Tax Planning

Closing the deal on your business sale is a massive achievement, but it’s not the finish line—it’s the starting line for the next phase of your wealth journey. The decisions you make with your proceeds in the months and years that follow are just as critical as the ones you made leading up to the sale. This is where you shift from building a company to building a legacy.

A successful exit isn’t just about the number on the check; it’s about how much of that number you keep and put to work for your future. Without a deliberate post-sale plan, you can easily lose a huge portion of your life’s work to taxes and missed opportunities. The key is to move with intention, turning that liquidity event into a foundation for lasting, tax-efficient wealth for you and your family. Let’s walk through the core pillars of a smart post-sale strategy.

Plan Your Reinvestment Strategy

Once the sale is complete, the clock starts ticking on deploying your capital effectively. One of the most powerful tools for deferring and even eliminating capital gains tax is investing in a Qualified Opportunity Zone (QOZ) fund. When you roll your sale proceeds into a QOZ fund within 180 days, you can defer paying capital gains on that money until the end of 2026. More importantly, if you hold that investment for at least 10 years, any gains generated within the fund itself are completely tax-free. This strategy allows you to reinvest your pre-tax dollars, letting your entire proceeds compound and grow from day one, which can dramatically accelerate your wealth creation.

Explore Wealth Transfer and Legacy Options

The sale of your business provides a unique opportunity to think about your legacy and how you want to support your family for generations to come. A straightforward and effective strategy is to make use of the annual gift tax exclusion. You can give up to $19,000 each year to any individual—including your children—without having to pay gift tax or file a gift tax return. If you're married, you and your spouse can combine your exclusions to give $38,000 per child, per year. Systematically transferring wealth this way reduces the size of your taxable estate over time, ensuring more of your hard-earned money stays with your family instead of going to the IRS.

Set Up the Right Trust Structures

Trusts are essential tools for asset protection, estate planning, and tax efficiency. For business owners with a philanthropic streak, a Charitable Remainder Trust (CRT) can be a particularly elegant solution. Here’s how it works: you contribute a portion of your sale proceeds to the trust. The trust then pays you (or another beneficiary) an income stream for a set period. When that period ends, the remaining assets go to a charity you’ve chosen. This move can provide several benefits at once: you get an immediate income tax deduction, you avoid paying capital gains on the assets you contributed, and you create a meaningful gift for a cause you believe in. It’s a strategic way to align your financial goals with your personal values.

Maintain Ongoing Tax Efficiency

Not all of your tax planning has to happen in the year of the sale. If your deal was structured as an installment sale, you’ve already taken a huge step toward long-term tax management. An installment sale allows you to receive payments from the buyer over several years. This spreads your taxable gain across multiple tax years, which can keep you in a lower tax bracket each year. This approach is also a great way to manage your exposure to the 3.8% Net Investment Income Tax (NIIT), which applies to high earners. By carefully managing your income recognition year after year, you maintain control over your tax liability long after the business is sold.

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Frequently Asked Questions

What's the single biggest tax mistake business owners make when they sell? Hands down, the biggest mistake is waiting too long to plan. Many owners treat the sale as a single event, but the most powerful tax-saving moves need to be made years in advance. Things like changing your business structure or qualifying for the QSBS exemption have multi-year look-back periods. If you only start thinking about taxes when a buyer is at the table, you’ve already left your most valuable tools on the shelf and are forced to play defense.

I already have an offer on my business. Is it too late to do any tax planning? It’s never too late to improve your outcome, but your options will be more limited. While you may have missed the window for a pre-sale entity change, you can still focus on negotiating the deal structure itself. Pay close attention to the purchase price allocation in an asset sale, as this directly impacts how much of your profit is taxed at lower capital gains rates. You can also negotiate for an installment sale to spread the tax hit over several years and immediately begin planning your post-sale reinvestment strategy.

Why is the difference between an 'asset sale' and a 'stock sale' so important? This distinction is a critical negotiation point that directly affects your wallet. As a seller, you almost always want a stock sale. It’s a clean transaction where you sell your ownership shares and typically pay one layer of long-term capital gains tax. Buyers, however, prefer an asset sale because it lets them get future tax deductions on the assets they purchase. The problem for you is that an asset sale can trigger higher ordinary income tax rates on certain items and can even lead to double taxation, significantly reducing what you ultimately keep.

My business is an S-corp. Am I in good shape for a tax-efficient sale? Operating as an S-corp is often a great starting point, especially since it can help you avoid the 3.8% Net Investment Income Tax if you were actively involved in the business. However, it isn't a guarantee of a low tax bill. You still need a proactive strategy. If the deal is structured as an asset sale, you must carefully negotiate the purchase price allocation to maximize capital gains treatment. An S-corp gives you a strong position, but it’s the first step in a comprehensive plan, not the last.

After the sale, what's the first thing I should do with the money to be tax-smart? Once the deal closes, the clock starts on some powerful reinvestment opportunities. The very first thing you should do is explore tax deferral strategies that have a time limit, like Qualified Opportunity Zones. You have 180 days from the sale to roll your gains into a QOZ fund, which allows you to postpone paying taxes on the profit. This lets you reinvest the full pre-tax amount, giving your capital a significant head start on compounding and growing your wealth for the long term.