You Got a $15 Million Offer for Your Business. Here's What You'll Actually Keep.
The letter of intent lands in your inbox. Fifteen million dollars. You read the number three times.
Then you start doing the math you've been doing in your head for a decade. The house paid off. The kids' college. Maybe a boat, maybe not. Maybe you finally stop answering the phone at 9pm.
Here's the problem. The number in the LOI is the price of the business. It is not the amount that reaches your bank account. And the gap between those two numbers is determined far more by how the deal is structured than by what the buyer agrees to pay.
Most owners spend two years negotiating the price and two weeks thinking about the structure. It should be the other way around.
Here's what a $15 million offer actually turns into.
1. The Headline Number Is Not the Wire Number
Start with the simplest version of the math: a stock sale, very low cost basis, and no complications. Real deals are never this clean, but it shows the shape of the problem.
Headline sale price | $15,000,000 |
Less transaction costs (banker, legal, accounting, ~3%) | ($450,000) |
Less federal capital gains tax (20%) | ($2,910,000) |
Less state tax (~5%) | ($727,500) |
Approximate net to you | ~$10,900,000 |
That's illustrative, not a projection. Your state, your basis, and your structure will move it.
Two other things can move it too. A 3.8% net investment income tax can apply on top for some sellers, though owners who actively run the business often avoid it. And if the deal is an asset sale, part of your proceeds may be taxed as ordinary income at rates well above 20%.
A $15 million sale becomes roughly a $10.9 million outcome before you've spent a dollar. That's still a life-changing result. It's just a different number than the one you've been picturing.
2. Stock Sale vs. Asset Sale Is the Biggest Lever Nobody Explains
When someone buys your company, they either buy your stock (the ownership of the entity) or your assets (the equipment, contracts, customer lists, and goodwill inside it).
Sellers generally prefer a stock sale because most of the proceeds are taxed as long-term capital gains. Buyers generally prefer an asset sale because they get a stepped-up basis and can depreciate what they bought.
That tension is where the negotiation lives. If the buyer pushes for an asset deal, some of your proceeds can be reclassified as ordinary income, such as depreciation recapture and certain inventory or receivables. The difference can be hundreds of thousands of dollars.
The point isn't that one structure is always right. It's that the structure is a price term, and you should negotiate it like one. A buyer asking for an asset deal is asking you for something. Ask for something in return.
3. QSBS Could Be Worth Millions, If You Qualify
If your company is a C corporation and you received your stock at original issuance, you may be sitting on one of the most valuable tax provisions in the code: Qualified Small Business Stock under Section 1202.
For stock that qualifies, a large portion of the gain, up to a cap, can be excluded from federal tax entirely. The rules changed in 2025 for newer stock, including a tiered holding period and a higher cap, and they differ for stock issued before and after the change.
The catch is that qualification depends on details: the type of business, the size of the company's assets when the stock was issued, how long you held the shares, and how the stock was acquired. Many owners find out they qualified only after the deal closes, which is too late to do anything about it.
If you're a C corp founder, have someone check this before you sign the LOI.
4. You Rarely Get Paid Everything on Day One
The headline price usually isn't the closing-day wire. Expect some combination of:
Escrow or holdback. Often 5% to 15% of the price is held back for 12 to 24 months to cover indemnification claims.
Earnouts. A portion of the price is contingent on the business hitting future targets, under someone else's ownership.
Seller notes. The buyer pays part of the price over time, with interest.
Rollover equity. You reinvest part of your proceeds into the buyer's new entity, often tax-deferred.
Each of these changes your tax picture, your timeline, and your risk. A $15 million deal with $3 million tied up in an earnout is not the same as a $15 million deal paid in cash at closing, even if the LOI says the same number.
When you plan your life around this money, plan around the cash you can count on, not the total on the page.
We have talked about this topic before on why selling at $10mil might be better than $40mil.
5. Your State Matters More Than You Think
Two sellers with identical deals can end up hundreds of thousands of dollars apart because of where they live.
Some states tax capital gains at zero. Others take 10% or more. That's a seven-figure swing on a deal this size.
It's tempting to think about moving before you sell. It can work, but states look hard at moves made right before a big liquidity event, and a real change of residency means a real change of life: where you live, where you vote, where your family is, how you spend your days. A move on paper that doesn't match reality tends to get challenged.
If it's something you're considering, it's a conversation to have with a tax professional well before the deal, not after.
6. The Best Planning Happens Before the LOI
Here's the uncomfortable truth about selling a business: most of your best tax planning options expire the moment the deal becomes a binding agreement.
Strategies like gifting shares to trusts, setting up a donor-advised fund, or restructuring ownership generally need to happen while the business is still just a business, not a pending sale. Once a buyer is under contract, the IRS can look through transfers made right before closing and tax them back to you.
That means the window for the planning that matters most is often 18 to 36 months before you sell.
For more on how trusts fit into this, see What Actually Decides If You Need A Trust?
7. Plan for What Comes After
The other side of a sale is the question we covered in our last post: what does the money actually need to do for the rest of your life?
A sale is a one-time event that has to fund decades of living. How much you keep matters, but so does what happens next: the withdrawal rate, health insurance, access to your retirement accounts, and the order of returns in the early years.
You can read the full breakdown in You Sold Your Business at 40. Here's What It Actually Costs to Never Work Again.
And if you want to see what a portfolio built from a clean slate looks like: $10mil Portfolio from Scratch
Final Thought
The price is what the buyer pays. The structure is what you keep.
Most owners put all their energy into the first and almost none into the second. The ones who come out ahead treat the structure, the timing, and the tax plan as part of the negotiation, not an afterthought for the accountant to clean up once the papers are signed.
They start early. They ask what's negotiable besides the price. And they decide what the money is for before the money arrives.
If the deal closed next quarter, do you know how much of the headline number would actually reach your account, and when?
If you're a business owner thinking about a sale, please schedule a call, and talk with a Moment founder.
Get in Touch With An Advisor
Frequently Asked Questions
Here are some answers to questions I received frequently about this topic.
How much tax will I pay when I sell my business?
It depends on the structure of the deal, your cost basis, your state, and whether any of the gain is taxed as ordinary income. For a straightforward stock sale, federal long-term capital gains tax is 20%, plus state tax and possibly a 3.8% net investment income tax. Asset sales can result in higher blended rates.
Is a stock sale or an asset sale better for the seller?
Generally, sellers prefer stock sales because more of the proceeds are taxed at capital gains rates. Buyers often prefer asset sales for the tax benefits they receive. The right answer depends on the specifics of the deal and what you can negotiate in exchange.
What is QSBS and could it apply to me?
Qualified Small Business Stock (Section 1202) allows eligible shareholders of certain C corporations to exclude a portion of their gain from federal tax, up to a limit. Eligibility depends on the business type, company size at issuance, holding period, and how the stock was acquired.
What is an earnout?
An earnout is a portion of the purchase price that's paid only if the business hits certain targets after the sale. It can bridge a valuation gap but shifts risk to you, since you're relying on performance you may no longer control.
When should I start planning to sell my business?
Ideally two to three years before the sale. Many tax and estate planning strategies need to be in place before a buyer is under contract, and cleaning up financials, ownership, and structure takes time.
Can I reduce taxes by moving to another state before I sell?
Possibly, but states scrutinize residency changes made right before a large sale. A move needs to be real and well documented, and it should be reviewed with a tax professional well in advance.
*Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.
Comments