SAVING TAX ON THE SALE OF YOUR BUSINESS

By Katherine Vessenes, JD, CFP®, RFC and Brett Larson, JD

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We frequently have clients who are reluctant to sell their business or even stock positions that have highly appreciated, because they are facing a huge capital gains tax at both the state and federal level.

This problem was exacerbated both in January of 2013 and March of 2014, when both the Federal government and Minnesota increased taxes dramatically for those selling appreciated assets.  Together, these changes meant that taxes on the sale of an appreciated asset like a business or stock would jump from 22.85% to 33.65% for those earning income over the amounts below.  Keep in mind a special event, like a sale of a business, will increase your income in the year you sell.

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