In part one of this two-part blog series, we went over some of the basic factors involved in understanding the tax ramifications of a business sale. Business sales are a form of income, meaning basic tax laws apply to them, and it’s important to ensure you understand the important crux points here so you don’t have to deal with the IRS for one of several possible issues.

At Utah Business Consultants, our business brokers are happy to help with every area of selling your business, including potential tax ramifications that may be present and how to evaluate these. In today’s part two of our series, we’ll dig into a few more important considerations within this realm.

tax ramifications business salesCapital Asset Classification

Within a business sale involving assets, which we went over in part one, the term used will generally be “capital assets.” Such capital assets can be classified in three general ways:

Are Tax-Free Sales Possible?

We’re all looking for ways to minimize the taxes we pay, including business owners completing a sale of their business. And while it isn’t usually possible to conduct a business sale without any taxes, there are a few exceptions: One common example is a sale using stock exchanges – if the right IRS provisions are met for these kinds of deals, taxes might be avoided altogether. Asset transfers can also be tax-free if the seller receives 100% buyer’s stock – that is, if the exchange remains completely non-cash. Our team will give you further details here if needed.

For more on tax ramifications of business sales, or to learn about any of our business sale or business broker services, speak to the staff at Utah Business Consultants today.

© Copyright 2023, Utah business consultants