Ask Terry Questions Business Buy Out

Business Buy Out

By Terry Savage on July 05, 2023 |

Getting 250k Before taxes.
What to do?

Terry Says

First, congratulations. And BEFORE you take that payout, please consult a CPA — so maybe the deal can be structured to reduce taxes. I’m thinking that if you are selling shares in a company you’ve held a long time, then you need to place an initial valuation on them, and see if there are “improvements” to your cost basis, and then write the deal papers in a away that the profit can be considered a long-term capital gain.

The max rate on long term capital gains is 20%. So you’ll need to set aside that amount for taxes, for sure.

Then you need to figure out a plan for the rest of your life — depending on whether you are retiring, or planning to start another business, or just buy a vacation home. All have consequences, and all will impact what you do with the money.

So just deposit the cash in a money market account at a bank, make an estimated tax payment, which will keep you below the insured limit. Then find a financial planner you can trust. Use this link to to find a fee only — FIDUCIARY — planner you can trust to look at the big picture of your current life and future hopes.

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