Business sale – cash distribution question
This may be too specific but….my partner and I are selling our business which will be paid out over three years by the buyer. I will receive about $35,000 per year and am asking if there’s any way to protect this money from taxes (I’m in the 28% bracket)?
Terry Says
Talk to your accountant. Depending on how the deal was structured – ie sale of shares over the 3 year period, vs a 3 year payout for sale of the business, you might qualify for capital gains treatment on the payout. So consult your accountant BEFORE you close the deal!
There may also be specific items like depreciation that must be recaptured, etc. So again check the tax possibilities with a pro before signing the deal.