Skip to content
Close
SEARCH
PHONE: (561) 453-1441
Request an Intro
PHONE: (561) 453-1441
Request an Intro
default

Case Study

How we provided tax planning support before, during and after a business sale.

Subject

Entrepreneur selling a $10M insurance broker business.

Objectives

  • Structure the transaction to maximize the portion of sale proceeds taxed at preferential capital gains rates rather than ordinary income rates.
  • Increase the seller’s after-tax proceeds.
  • Reduce state and local tax exposure where possible.
  • Incorporate capital gains mitigation planning to reduce the overall tax burden associated with the sale.
  • Coordinate the transaction’s tax structure with estate, gift and succession planning to support broader wealth transfer objectives.

Process

  • L-Tax Team: Modeled stock, asset and deemed asset sale alternatives; identified and classified transferred assets; quantified ordinary income exposure; evaluated installment sale treatment, transaction cost treatment and other capital gains mitigation opportunities; and coordinated tax reporting requirements.
  • Wealth Planning Team: Projected capital gains tax exposure, evaluated capital gains mitigation strategies such as timing of recognition, charitable planning and other tax-efficient liquidity planning techniques; coordinated the timing of the sale with the seller’s broader income profile; and integrated liquidity planning with estimated tax obligations.
  • Estate and Trust Team: Evaluated presale transfers, trust and family entity planning, and broader estate and gift tax strategies to align the liquidity event with multigenerational wealth transfer goals while supporting capital gains mitigation and wealth preservation.

Strategy

  • Began planning early in the transaction process.
  • Analyzed entity-level and asset-level tax consequences to compare available sale structures.
  • Allocated value toward goodwill and other assets eligible for capital gains treatment where supportable.
  • Reduced exposure to ordinary income assets, including receivables and recapture property.
  • Evaluated capital gains mitigation strategies, including sale timing, charitable techniques and other planning opportunities designed to reduce recognized gain or improve after-tax outcomes.
  • Coordinated the sale with the seller’s personal wealth, estate and succession planning objectives.

Results

Client has structure and process around decision-making for exercised options and remaining ISOs. Funding of retirement and financial plan has been initiated. Portfolio risk has been significantly reduced.

Estimated tax savings: $437,179.00

Delivered a more tax-efficient transaction structure, strengthened reporting support, incorporated capital gains mitigation planning and aligned the business sale with the seller’s long-term financial and estate planning goals.

Potential tax savings: $150,000.00

LTax is a boutique tax firm emphasizing personalization, communication, and
initiative-taking responsiveness.

We take a consulting approach to tax preparation and planning, ensuring regular client communication and a personalized understanding of our clients’ needs. We tirelessly research tax mitigation strategies and develop actionable recommendations for the benefit of our clients.

 
Our Solutions
adam-v2-700

Adam Raschke, JD

Director, Tax Practice Lead

Request an Intro

Schedule your complimentary 30 minute discovery call so our team can learn about your goals and how we might be able to help. Prefer a phone call? Call us at (561) 453-1441.