August 2, 2021

How A Tax Plan Can Save Millions In A Business Sale

Although a comprehensive tax plan was painstakingly crafted and designed, a client went dark for nearly nine months. Less than a week before the sale was to take place the client called and asked if everything was ready to go. A significant portion of the tax planning strategies that had been crafted couldn’t be executed or implemented in a matter of days.

Four partners in an Amazon e-commerce business positioned their business for sale, it was discovered that they had no written partnership agreement and only a handshake gentleman’s agreement. As the business moved towards the sale the lack of a decision making mechanism became problematic.

A husband and wife team that had started a business as a side hustle eventually turned it into a full-time business and eventually an eight figure exit. They had done extensive tax planning for their estate and had planned on leaving a bulk of their estate to their favorite charity. What they didn’t realize is they could do the same while they were living and save millions of dollars in taxes when they sold their business, and then have those tax savings benefit their charity.

A young woman who was 22 years old and a freshman in college started a business targeting her peer group. After growing her business for a few years she wanted to sell her business and go back to college. An exit strategy and a tax plan was crafted to eliminate all $87,000 worth of taxes and use those savings to fund her college education.

Shanyn Stewart
Advanced Accounting
Lambertville, Michigan
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