Why Sell Your Business in 2010?

Why sell your business in 2010? Significant tax advantages, and not just capital gains taxes.

Maximizing value for our clients in a sale is a top concern at Kasper & Associates, so an article, “Federal Capital Gain Tax Rates: Where are they headed?”, by Monty Walker, CPA, CBI, BCB of Walker Business Advisory Services caught our attention. Monty has done an excellent job of outlining what will occur after this year regarding the capital gains tax and possible Health Care Reform surtax.

Full article: http://campaign.constantcontact.com/render?v=001S22Ky2nkF8Z9AAAEepjQzc9puNwipGe6eahz0G8lFunyRU3Ni6vMeHmnRRTMszHmzaJS4P7Tt3Jf4lUKXOIP_Xe4czS9dz9CRhz6rGc6GwVIWcPu_R8zXg%3D%3D

Highlights:

§ 2011 will see two major changes to current tax rates: (1) The top capital gains rate of 15% is scheduled to increase to 20%, and (2) Bush administration tax cuts will expire, returning the top federal tax rate to 39.6%.

§ Congress is considering increasing capital gains taxes even higher, above the 20% level.

§ Pending Health Care Reform legislation includes an additional surtax (up to 5.4%) on those classified as wealthy, effectively driving the top tax federal rate to 45%.

§ Quote: “If Congress decides to implement further increases, anyone who waited until 2011 to sell a business will wish they could go back in time to 2010.”

Bottom line: If you are considering the sale of your business, this may be the best time.

Keep in mind that the selling process can take 6 months or longer. Those who wait to begin until the 3^rd or 4^th quarter will be unlikely to close before year-end, and will fall under whatever tax rates are in effect for 2011.