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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®








 CLOSING-YOUR-BUSINESS SALE

  

Are You Ready to Retire?

Retirement Budgeting

Sources of Retirement Income

Tax-Deferred Savings Vehicles

Estate Planning

Selling Your Business

Getting Your Business Ready for Sale

Working With a Business Broker

Closing-Your-Business Sale

More Resources: Retirement Planning 		  Payout Advice From a Pro

Price is only the tip of the iceberg in a successful business sale. How you structure the payout of the sale price can have a significant impact on how much you ultimately make on your business, says Michael Packard, CPM, a consultant and business broker in Carlsbad, Calif.
  • Get as much cash up front as you can for your business, with a three- to seven-year payout period.
  • Demand a continuing role in the company to protect yourself from changes that might erode your proceeds, if your payout is based on future net profit.
  • Take a portion of your businesses value in the form of a consulting contract. The buyer can deduct it as a business expense, and you will be taxed on the funds at the tax rate for ordinary income.
  • Consider taking a lien on a buyer’s other assets, such as a home, as protection during a deferred payment plan.

TIP: Be sure your consultant fees are within the ranges of fair market value for the services, or you may be questioned by the IRS. —Commerce Clearing House Business Owner’s Toolkit

Tax Aspects of Selling >