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Knowledge Center
Business Sales & Transactions
The structure of a business sale determines how much of the purchase price you keep. This knowledge center covers every major tax issue in a business transaction — from the letter of intent through closing.
What This Knowledge Center Covers
Selling a business is one of the largest financial transactions most owners will ever complete. The amount written in the purchase agreement is not the amount you keep — the structure of the transaction, the allocation of the purchase price, and the tax treatment of each asset class determine the after-tax result.
This knowledge center covers the full range of tax issues in a business sale: the asset vs. stock sale decision, goodwill and personal goodwill, Section 197 intangibles, installment sales, depreciation recapture, and partnership rollover equity. Each article cites the governing IRC sections and relevant case law.
Most of the tax structure of a business sale is determined before the letter of intent is signed — not after. The earlier you engage a qualified tax advisor, the more options you have.
Articles in This Series
Asset Sale vs. Stock Sale
The fundamental tax difference between asset sales and stock sales for S corporations — built-in gains, double taxation, and Section 338 elections.
Goodwill Basis and Personal Goodwill
Why internally generated goodwill has zero basis, the personal goodwill doctrine, and how purchase price allocation affects after-tax proceeds.
Section 197 Intangibles
The 15-year amortization rule for acquired intangibles — what qualifies, what is excluded, and the anti-churning rules.
Inventory Allocation
How inventory is valued and allocated in a business sale — LIFO recapture, the impact on ordinary income, and buyer-seller conflicts.
Depreciation Recapture
Section 1245 and Section 1250 recapture — how prior depreciation deductions are recaptured as ordinary income when assets are sold.
Installment Sales
Deferring gain under IRC §453 — the gross profit ratio, recapture rules, related-party traps, and the pledging rules.
Partnership Rollover Equity
The IRC §721 non-recognition rule, disguised sale rules, Section 1061 carried interest, and how to structure a PE rollover correctly.
Gain Realized vs. Gain Recognized
The foundational distinction between gain realized and gain recognized — and the non-recognition provisions that defer or exclude gain.
Our Service
Small Business Tax & Advisory
CPA and EA-led tax planning for business sales, asset vs. stock sale structuring, installment sales, and post-sale tax strategy for owners and buyers.
Planning a Business Sale?
The tax structure of a business sale is largely determined before the letter of intent is signed. Contact us early — the earlier we engage, the more options you have.
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