Here’s a link to an excellent article from CNBC about why many business owners think now is an ideal time to sell: http://www.cnbc.com//id/45684006
If you’ve read my previous business sale posts you’ll likely recognize my agreement that if you want to avoid paying significantly higher capital gains taxes then the time to start the business selling process is in January 2012. Why? The average marketing time range for a small or lower-mid market business sale is 6-12 months, and on January 1, 2013 the regular capital gains tax rate is scheduled to go from 15% to 20%. In addition, as part of the Obama health care bill, there is an additional 3.8% tax on passive income (including capital gains) that goes into effect on that date for individuals making more than $200,000 and couples making more than $250,000 in taxable income. So, yes, capital gains tax rates will go from 15% to 23.8%. In other words, if you sold a business that had a capital gain of $2 million and it closed on or before December 31, 2012 vs. a day later on January 1, 2013, you’d save $176,000.
So, if you have been sitting on the fence when contemplating a business sale, now would be a very good time to get off that fence!
