Selling a Business Tax Calculator

💸 What Will You Owe in Taxes?

Thinking of selling your business? Congratulations—it’s a major milestone! But before you pop the champagne, you’ll want to answer one key question:
“How much will I owe in taxes after the sale?”

That’s where a Selling a Business Tax Calculator comes in handy. In this article, we’ll walk through the key factors, give you a calculator to estimate your taxes, and provide a visual infographic to help you plan smarter.

Want to estimate how much you’ll keep after taxes?
Use the calculator below to enter your sale price, cost basis, and estimated tax rate.

💰 What Gets Taxed When You Sell a Business?

When you sell your business, you may owe taxes on the profit you make from the sale. This is typically considered capital gains and taxed differently depending on:

• What assets are sold (goodwill, equipment, inventory, etc.)
• Whether it’s a stock sale or asset sale
• How long you owned the business
• Whether you’re in the U.S. or another country

⚠️ Always consult with a tax advisor to get accurate numbers based on your location and entity type

🧾 Common Taxable Categories in a Sale

Here’s what might be taxed when you sell:

1. Capital Gains Tax
Applies to profit from selling long-term assets (e.g., goodwill, business name)

2. Depreciation Recapture
If you claimed depreciation on business property, the IRS may “recapture” some of it

3. State or Provincial Taxes
Varies widely depending on your location (some places tax more than others)

4. Ordinary Income Tax
Applies to inventory, accounts receivable, or some short-term asset gains

📊 Example Calculation

Let’s say:

• Sale price = $500,000
• Original investment = $200,000
• Capital gains tax rate = 20%
• Additional tax (e.g., state or recapture) = 5%

Gain = $500,000 – $200,000 = $300,000
Tax Owed = $300,000 × 25% = $75,000
Estimated Net After Tax = $425,000

💡 Tips for Selling Your Business Smartly

1. Work with a tax advisor early
Structuring the sale correctly can save you thousands in taxes

2. Consider installment sales
Spreading payments over several years can reduce your annual tax burden

3. Know the difference: asset sale vs stock sale
Asset sales are more common but taxed differently than stock sales

4. Keep detailed financial records
These are critical for due diligence and justifying your cost basis

5. Factor in legal and broker fees
These affect your net payout and can sometimes be tax-deductible

📌 Final Thoughts

Selling your business is a big deal—and your tax bill can take a big bite out of your profits if you’re not prepared.