QSBS News & Analysis

Five Tax Tips Before Selling Your Business

Entrepreneurs looking to sell their businesses often overlook tax planning, potentially losing significant savings. A survey by BNY Wealth highlights that nearly half of professional advisors report their clients spend insufficient time on tax and wealth transfer planning. Michael Paulus, founder of PCM Encore, noted a similar oversight cost him hundreds of millions during the sale of Assurance IQ for $2.4 billion in 2019. Edward Renn, a lawyer with Withers, advises business owners to assess their eligibility for the Qualified Small Business Stock (QSBS) tax exclusion. This exemption allows reduction of capital gains taxes if stock is held for more than five years. The One Big Beautiful Bill Act increased the maximum exemption to $15 million for stock issued after July 4, 2025. The QSBS exemption has specific eligibility requirements and excludes many trades like healthcare and accounting. For ordinary investors, considering tax strategies like the QSBS exclusion could significantly maximize the proceeds from a business sale, making long-term planning crucial.