#business-exit

Business Exit

Exit strategies and planning for business owners preparing to sell, retire, or transition

July 29, 2026

Tax Liability Insurance in Small Business M&A: How to Close a Deal With a Known Tax Risk

Tax liability insurance transfers one specific, identified tax risk — an invalid S-corp election, a Section 382 NOL limit, QSBS eligibility — to an insurer instead of a price cut, escrow, or seller indemnity. Premiums run 2–5% of the insured limit, underwriting takes two to four weeks, and most carriers want exposure above roughly $1 million. Here's how it works and when to raise it before a closing deadline.

mike

mergers-and-acquisitionsinsurancetax-planning

July 27, 2026

Missouri Just Eliminated Its Capital Gains Tax: What It Means for Business Owners Who Sell

Missouri's HB 594, signed July 10, 2025, made it the first state to fully exempt individuals from state capital gains tax — a 100% subtraction covering stocks, real estate, crypto, and pass-through business sales, with C corporations waiting on a 4.5% rate trigger. Here's who qualifies, what's excluded, and how it changes exit timing for business owners.

mike

taxcapital-gainstax-planning

July 19, 2026

Letter of Intent for a Small Business Sale: What's Binding, What's Negotiable, and What Kills Deals

Most letters of intent are labeled non-binding, but exclusivity, confidentiality, and break-up-fee clauses inside them are typically enforceable. This guide covers LOI terms in sub-$10M business sales — asset vs. stock structure, 30–90 day exclusivity windows, working capital true-ups, price allocation, and the mistakes that cost sellers deals.

mike

business-acquisitionbuying-a-businessmergers-and-acquisitions

July 16, 2026

The Deferred Sales Trust: How Business Owners Defer Capital Gains on an Exit Without a 1031 Exchange

A deferred sales trust lets a business owner spread capital gains tax from a sale over 10-20 years under IRC Section 453 with no like-kind reinvestment requirement, but setup and management fees commonly total $100,000-$300,000+ over a decade and the IRS has never issued formal guidance approving the structure.

mike

taxtax-planningcapital-gains

July 16, 2026

Disability Buy-Out Insurance: The Buy-Sell Agreement Gap Most Co-Owners Miss

A 35-year-old is six times more likely to become disabled than to die before 65, yet most buy-sell agreements only plan for death. How disability buy-out (DBO) insurance funds a co-owner buyout — elimination periods, cross-purchase vs. entity redemption, and why premiums are nondeductible but proceeds are tax-free.

mike

business-insurancesmall-businesspartnerships

July 9, 2026

The Founder's Guide to ESOPs: Selling Your Business to Your Employees

How an ESOP lets founders exit on their own terms — 6,411 US ESOPs hold $2.1 trillion for 15.1 million employees. Covers Section 1042 capital gains deferral, the S-corp federal tax exemption, 2–4% deal costs, fiduciary and repurchase obligations, and which businesses actually fit the structure.

mike

succession-planningbusiness-exitemployee-benefits

May 17, 2026

F-Reorganization Under Section 368(a)(1)(F): The Pre-Closing Restructuring PE Buyers Use to Buy S Corporations

A practical walkthrough of the Section 368(a)(1)(F) reorganization — the six regulatory requirements, the six-step Rev. Rul. 2008-18 choreography, why PE buyers prefer it to a 338(h)(10) election, and how it preserves the operating EIN while giving the buyer asset-basis step-up and the seller tax-deferred rollover equity.

mike

s-corptax-planningmergers-and-acquisitions

May 17, 2026

The Net Working Capital Peg and Post-Closing True-Up: How Business Sellers Lose Six Figures at Closing

How the net working capital peg and post-closing true-up quietly transfer cash from sellers to buyers in mid-market M&A, and the monthly accrual-basis bookkeeping discipline that protects sale price.

mike

mergers-and-acquisitionsworking-capitalbusiness-exit

May 17, 2026

Quality of Earnings Reports: How Sellers Defend EBITDA, Survive Buyer Due Diligence, and Avoid Last-Minute Price Cuts

A Quality of Earnings (QoE) report decides whether a buyer accepts your EBITDA or re-trades the deal price. This guide breaks down the 12 add-backs buyers accept, the 8 they reject, and how the working capital peg quietly cuts seller proceeds at closing.

mike

mergers-and-acquisitionsbusiness-exitbusiness-valuation

May 16, 2026

Section 1377(a)(2) Closing-of-Books Election: How S Corporations Allocate Pass-Through Income When a Shareholder Leaves Midyear

Section 1377(a)(2) lets an S corporation split its tax year when a shareholder fully exits, allocating pass-through items to the period each owner actually held stock. This guide covers when the election is available, who must consent, the 1.1368-1(g) alternative, and the bookkeeping it demands.

mike

s-corps-corporationtax-planning

May 16, 2026

Section 338(h)(10) Election: How Buyers and Sellers Turn a Stock Deal Into an Asset Deal

A practical guide to the federal tax election that lets buyers and sellers of S corporations and consolidated-group subsidiaries treat a stock purchase as an asset purchase for tax purposes — covering Form 8023, the seller gross-up, purchase price allocation under Section 1060, and the mistakes that commonly kill the election.

mike

mergers-and-acquisitionstaxtax-planning

May 15, 2026

Section 1248 Deemed Dividend on CFC Stock Sales: A U.S. Shareholder's Guide to E&P, GILTI, and PTEP

Section 1248 recharacterizes part of a U.S. shareholder's gain on the sale of CFC stock as a dividend, capped by the corporation's earnings and profits and reduced by PTEP from GILTI and Subpart F inclusions. This guide explains who is affected, how the lookback works, why corporate sellers can prefer the recharacterization for Section 245A, and how to build a defensible work paper.

mike

international-taxforeign-corporationstax-planning

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