Business Exit & Succession Tax Planning Guide

Succession options

• Sale to insiders (management or partners)
• Sale to third parties
• Gifts or gradual transfers to family

Valuation & price

Understand income, market, and asset approaches; align price with tax goals and financing capacity.

Family transfers & trusts

Use annual exclusion gifts, GRATs, or other estate tools where appropriate; watch related‑party rules and basis implications.

Funding & buy‑sell agreements

Set clear triggers (death, disability, retirement) and funding (insurance, installments). Coordinate with entity type and tax elections.

Timeline & governance

Build a multi‑year plan with roles, training, and board oversight; ensure documentation and consents are in place.

Deal structures: asset vs. stock

Asset sales can allow buyers to step up basis; stock sales may be simpler for sellers. Tax results differ by entity type.

Purchase price allocation

Allocate across asset classes (cash, receivables, inventory, fixed assets, intangibles, goodwill). File the appropriate forms to report the allocation.

Closing & liquidation steps

• Final payroll and sales tax filings
• Cancel permits and close accounts
• File final income tax return and mark final boxes

State & local considerations

Bulk sales notices, tax clearance certificates, and successor‑liability rules may apply—check state requirements early.

Records & after‑close obligations

Retain business records for required periods; keep access to old email, accounting, and payroll systems for notices and amendments.