Lesson · Facts First
Preparing to Exit Your Business
Businesses sell for multiples of transferable value - the years before the sale are where the multiple is built.
The facts
- 01Buyers pay for what walks away cleanly: documented processes, delegated management, contracted revenue, and financials a CPA can sign - owner-dependence is the multiple killer.
- 02Asset sale vs stock sale changes both buyer and seller tax math dramatically - most small-business deals are asset sales, and allocation of the purchase price (IRC 1060) drives the tax character.
- 03Installment sales (IRC 453) spread gain across years of payments; an eligible S-corp can defer up to $10M of gain at 10% under Section 1202 if it was a qualified C-corp for 5 years - QSBS planning starts years before an exit, not at it.
- 04Start the countdown early: QSBS holding periods, 1031s on owned real estate, and retirement plan finalizations are all clock-based.
Sources
- IRC Sections 1060, 453, 1202 (QSBS)
- IRS: Selling a business guidance
Educational content only — not tax, legal, investment, or VA-benefits advice. Figures verified against the cited sources for 2026; confirm your own situation with a qualified professional before acting.
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