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Financial planning before selling your business.

The sale of your business may be the largest financial event of your life — and most of the moves that protect its value close the moment a letter of intent is signed. This guide covers what to put in place, and when.

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Why planning must start before the sale

Once a deal is under a letter of intent, most tax and estate strategies are off the table — the value has crystallized and the clock has run out. The owners who keep the most of their proceeds are the ones who started planning one to three years ahead. This guide is the map.

Define your "number" — net of tax

The headline price is not what lands in your account. Work backward from the after-tax proceeds you'll actually need to fund your post-sale life and legacy, then plan the deal — and the surrounding strategies — to hit that number.

01 / Guide

How your deal will be taxed

Asset sale vs. stock sale, purchase-price allocation, ordinary vs. capital gain, installment sales, and escrow/earnouts each change the bill — and your entity type (C-corp, S-corp, LLC/partnership) determines what strategies are even available.

  • Asset vs. stock sale
  • Purchase-price allocation
  • Installment sales & earnouts
  • Entity-structure implications
02 / Guide

Qualified Small Business Stock (QSBS) — §1202

For eligible C-corporation stock, Section 1202 can exclude a large share of the gain. The rules were updated by 2025 legislation (the "OBBBA"), including tiered exclusions by holding period and higher caps — eligibility and amounts are fact-specific and must be confirmed with your CPA for your particular stock.

Section 1202 changed materially in July 2025, and the rules now depend on when the stock was issued. Stock issued after 4 July 2025 follows a tiered exclusion — 50% at a three-year hold, 75% at four years, 100% at five or more — with a per-issuer cap of the greater of $15 million or ten times adjusted basis, and a gross-asset ceiling of $75 million at issuance. Stock issued on or before that date keeps the prior rules: a full five-year hold for any exclusion, a cap of the greater of $10 million or ten times basis, and a $50 million ceiling. Exchanging older stock for newly issued shares does not change which rules apply. A company that issued shares across that date may have shareholders facing different outcomes at the same exit. Eligibility also turns on requirements many businesses do not meet — the issuer must be a domestic C corporation, stock must be acquired at original issuance, and professional services, financial services and hospitality are excluded regardless of size. This is an area where the details decide the outcome, and it requires review by a CPA or tax attorney who works in it specifically.

  • C-corp original-issuance stock
  • Holding-period requirements
  • 2025 tiered exclusion
  • §1045 rollover; gift/trust stacking
03 / Guide

Tax-reduction & deferral strategies

Charitable remainder trusts and donor-advised funds funded with pre-sale equity, installment sales, and (with caution) opportunity zones can reduce or defer the tax — but timing relative to the letter of intent is critical.

  • CRTs & DAFs funded pre-sale
  • Installment sale structuring
  • Opportunity zones (with caveats)
  • Pre-LOI timing to preserve benefits
04 / Guide

Estate & gifting moves that expire at signing

Gifting equity into trusts while the valuation is lower, using grantor trusts, and applying your federal estate/gift exemption before the value crystallizes can move significant wealth out of your taxable estate.

  • Gifting pre-sale at lower value
  • Grantor trust strategies
  • Using the federal exemption
  • Coordination with your attorney
05 / Guide

The day after the wire

A sale turns an illiquid, concentrated asset into cash that must be invested thoughtfully. We help you avoid sudden-wealth mistakes and build a diversified, tax-aware income plan — see our concentrated-stock guide if you take part of the deal in acquirer stock.

  • Sudden-wealth guardrails
  • Diversified reinvestment
  • Tax-aware income plan
  • Acquirer-stock diversification

The Florida advantage, your deal team, and timing

Florida residents owe no state income tax on the gain — a real edge, provided residency is genuinely established before the sale. Throughout, we serve as the quarterback for your deal team (M&A attorney, CPA, and banker), and we work to a timeline: three years, one year, and 90 days out, each with its own moves. See our companion 3-year pre-liquidity checklist. Business owners in the region can also start with our Jacksonville business-owner planning page.

Reviewed by Alex J. Potenza, CFP®, CPWA® — Vice President & Director of Financial Planning. Educational only; not individualized tax, legal, or investment advice. Coordinate with your CPA and attorney. Current as of August 2026.

Frequently asked

Frequently asked

How do I financially prepare to sell my business?

Start well before a deal. Define your net-of-tax number, confirm your entity structure, evaluate QSBS eligibility, complete estate and gifting moves while the valuation is lower, and assemble a team (fiduciary advisor, M&A attorney, CPA, banker). Most high-value moves close once a letter of intent is signed.

How can I reduce taxes when selling my business?

Depending on your structure: qualifying for the QSBS exclusion, gifting appreciated equity before the sale, using charitable trusts or donor-advised funds, structuring installment sales, and — for Florida residents — benefiting from no state income tax on the gain. These are fact-specific and require your CPA and attorney.

What is QSBS and how does Section 1202 work?

Qualified Small Business Stock (Section 1202) can let owners of eligible C-corporation stock exclude a large portion of the gain on a sale if holding-period and other requirements are met. The rules changed under 2025 legislation, so eligibility and exclusion amounts must be confirmed with your CPA for your specific stock.

Do I pay Florida state tax when I sell my business?

Florida has no personal income tax, so Florida residents generally owe no state income tax on the gain from selling a business — federal tax still applies. Establishing genuine Florida residency/domicile before a sale matters if you're relocating.

Selling in the next 1–3 years?

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what you built.

The most valuable planning happens before the letter of intent. Schedule a complimentary pre-sale planning consultation.

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