Exit and Business Sale Tax Planning for Southern California Owners
Selling a business or real estate portfolio is the most consequential tax event most owners ever face. In California, there is no preferential capital gains rate — gains are taxed as ordinary income at up to 13.3% state plus federal. Planning before the transaction closes is everything. Planning after is mostly paperwork.
A $3M business sale in California can result in combined federal and state taxes of $900K–$1.2M or more without planning. With the right structure — asset versus stock sale analysis, installment sale elections, Qualified Opportunity Zone investments, or entity restructuring before the sale — that number can be significantly lower. The window for most strategies closes the moment the deal signs. Start planning 12–24 months before you intend to sell.
Exit and Sale Tax Planning — Full Scope
Pre-Transaction Tax Modeling
We model the full tax outcome under multiple scenarios — asset sale, stock sale, installment sale, partial gift — so you understand after-tax proceeds before you negotiate deal terms.
Asset vs. Stock Sale Analysis
Buyers want asset purchases for the step-up in basis. Sellers prefer stock sales to avoid ordinary income on asset gains. We quantify the difference and help structure deal terms that account for the tax gap.
Installment Sale Planning
Spreading proceeds over multiple years defers gain recognition and may keep income below higher bracket thresholds. We model whether an installment sale outperforms a lump-sum sale after tax.
QSBS — Section 1202
For qualified small business stock held more than five years, up to $10M of gain may be federally excluded. California does not conform — but the federal exclusion alone is substantial. We evaluate QSBS eligibility early in the lifecycle.
Qualified Opportunity Zone Deferral
Rolling sale proceeds into a QOZ fund defers the original gain and potentially eliminates appreciation on the QOZ investment after 10 years. We evaluate whether QOZ fits your timeline and risk profile.
Pre-Sale Entity Restructuring
In some cases, restructuring the entity years before the sale creates meaningful tax advantages. We evaluate pre-sale structural moves that improve your after-tax outcome before you are in a live transaction.
The Best Exit Planning Starts 12–24 Months Before the Sale
Start the Conversation Before You Are Mid-Transaction.
Contact us before you are in the middle of a transaction. The earlier the conversation, the more we can do.