Business Tax Planning – Part 2 – How can I pay less tax when I sell my business?
If you are planning on selling your business in the future, you should be aware of the Lifetime Capital Gains Exemption on the sale of active small businesses.
When you sell a capital asset, such as shares of a company, that is usually taxed as a capital gain. However, when you sell shares of an active business, you may qualify for a tax incentive called the Lifetime Capital Gains Exemption, which allows you to claim almost $900,000 of the capital gain exempt from taxes. That means you can pocket up to $900,000 tax-free (although the alternative minimum tax can apply). [read more…]