Former Downey Brand family law group joins Murphy Austin
Sacramento-based commercial law firm Murphy Austin Adams Schoenfeld LLP has added a new specialty to its offerings following the addition of a family law group previously with Downey Brand LLP.
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Associated Press
2 hours ago
- Associated Press
Selling a Business: Expert Tax Guide & Checklist Released
has released a new and updated guide on selling a business for consumers. SACRAMENTO, CA / ACCESS Newswire / June 21, 2025 / Selling a business might leave you with only 66% of the proceeds after taxes. That's a huge chunk gone to Uncle Sam. Ryan Paulson, Chief Editor at IRAEmpire, says, 'The gap between your sale price and the money that ends up in your bank account can be eye-opening if you're selling a small business you built yourself. The sale typically triggers a long-term capital gain tax of 20% plus an extra 3.8% net investment income tax. Many business owners mistakenly think they'll pay ordinary income rates that can reach almost 50% in total. Let's look at real numbers: A business started with $100,000 and sold for $10 million would face federal capital gains tax that cuts the proceeds by about $2 million.' Schedule a Consultation With America's Best Business Selling Experts State taxes pack an even bigger punch. California residents could pay an additional 13.3% tax on their capital gain. A $10 million sale with a $9.9 million gain would leave you with just $6.6 million after federal and state taxes. Tax planning becomes crucial to protect the wealth you've built over years. This detailed guide shows you seven clear steps to sell your business. You'll learn about tax implications and ways to legally reduce your tax burden. The goal? To help you keep more of what you've worked so hard to build. Alternatively, explore the best business sale brokers of 2025 on IRAEmpire here. Step 1: Prepare for the Sale with Tax in Mind The gap between a good and great business sale comes down to preparation. Smart tax planning could determine whether you keep most of your money or watch it vanish in taxes. Start tax planning early Your tax planning should begin long before you put your business on the market. Research shows businesses that plan their exit 3-5 years ahead achieve 20-40% higher valuations than those who rush the process. Starting early opens up more tax-saving options that you won't find if you're in a hurry to sell. Business owners often focus only on growing their company. They don't think about tax implications until it's too late. This leads to reduced profits after taxes. The best exits happen when tax planning starts at least two years before the sale. Many experts suggest starting five years ahead. Early planning lets you build the right team. You'll need a financial advisor, CPA, business attorney, and estate attorney. These professionals can work together to create a financial strategy that lines up with what you want after selling. Review your business structure Your business structure plays a big role in how taxes will affect your sale. Each type-sole proprietorship, partnership, LLC, S Corporation, or C Corporation-comes with its own tax rules that can change your final proceeds. Pass-through entities (LLCs, partnerships, S Corporations) send sale gains straight to your personal tax return. C Corporation owners should note that selling stock instead of assets helps avoid double taxation, which could cut your proceeds by about 50%. The structure also decides if your sale counts as an asset or stock sale. Buyers usually want asset purchases for tax benefits. Sellers do better with stock sales because of better capital gains treatment. Knowing these details before negotiations helps you keep more money after taxes. Organize financial records Clean, well-laid-out financial records speed up sales and help you get the right price. Buyers will examine your financial health carefully. Messy or incomplete records raise red flags. You need these key financial documents: Buyers bring in accounting experts to check everything. They match your statements against bank records, invoices, receipts, and tax returns. Good documentation builds trust and gives you more power in negotiations. Getting your financial statements professionally audited before the sale helps too. You'll spot weak points early and can fix issues that might lower your company's value or make negotiations harder. The time you spend getting your business ready for sale-especially with tax planning and financial organization-leads to higher values and smoother deals. Taking care of these things early helps you keep more of the wealth you've built. Step 2: Choose the Right Sale Type Selling your business brings a crucial decision: choosing between an asset sale or a stock sale. This choice will substantially affect your tax burden and determine the money you'll keep after closing the deal. Asset sale vs stock sale: pros and cons An asset sale means the buyer purchases individual business assets instead of the entire entity. These assets include equipment, inventory, intellectual property, and customer lists. You keep the legal entity after the sale, though many businesses close down afterward. Buyers love asset sales because: The seller's point of view shows some drawbacks: A stock sale works differently. The buyer purchases your ownership interests directly, and the entire business-assets and liabilities included-goes to the new owner. Sellers usually benefit from stock sales because: Buyers often shy away from stock sales because: Consult the Best Business Brokers in the US Here. How sale type affects taxes when selling a business Your sale structure creates major tax differences. The IRS looks at each asset separately in an asset sale. Different assets face different tax treatment: You and the buyer must use the 'residual method' to split the purchase price across asset classes. This split greatly affects your tax bill because: Pass-through entities (S corporations, LLCs, partnerships) send gains straight to your personal tax return. C corporations might pay twice in asset sales-corporate-level tax on gains plus shareholder-level tax on distributions. State taxes add another layer of complexity. Asset sales might need you to split gains among multiple states, just like operating income. Stock sales mostly get taxed in your home state. Buyers and sellers want different tax outcomes, which makes the final structure a big negotiation point. Many buyers pay more for asset sales to make up for sellers' higher taxes. Some deals include 'tax gross-ups' where buyers increase the price to cover the extra taxes you'd pay in an asset versus stock sale. Step 3: Plan for Federal and State Tax Implications You need to understand your tax burden before selling your business. Poor tax planning can cut your proceeds in half. What looked like a great exit could end up disappointing. Capital gains tax overview Capital gains tax becomes your biggest tax concern when selling a business. The tax applies to the difference between what you sell for and your 'basis' - your original cost plus improvements. Let's say you started your business with $100,000 and sell it for $10 million. Your long-term capital gain would be $9.9 million. The federal capital gains rate starts at 15% for business sales with assets held over a year. This rate can go up to 20% if you have higher income. The math is simple - multiply your gain by the rate that applies to you. In our example, a 20% federal capital gains tax would reduce your money by about $2 million. State income tax differences State taxes can make a big difference in what you keep. The impact varies based on where you live: Where you live at the time of sale really matters. States use strict 'domicile' tests to figure out if they can tax you. Running your business in multiple states could mean splitting up the gain. You might need to pay taxes in each state where you did business. Depreciation recapture and NIIT The Net Investment Income Tax (NIIT) adds another 3.8% federal tax. This kicks in if your modified adjusted gross income tops $200,000 (single) or $250,000 (married filing jointly). The NIIT stacks on top of capital gains tax and can push your federal rate to 23.8%. Depreciation recapture can also increase your tax bill. The IRS takes back previous depreciation deductions when you sell business property for more than its depreciated value. They tax this recaptured amount as ordinary income - up to 37% instead of capital gains rates. Business equipment (Section 1245 property) faces recapture on all claimed depreciation. Real estate (Section 1250 property) has a maximum recapture rate of 25%. Step 4: Use Smart Tax Strategies to Reduce Liability Tax-saving strategies can reduce your liability by a lot while selling a business. Smart planning helps you keep more of your hard-earned proceeds legally. Installment sales to spread tax You can receive payments over time instead of all at once with an installment sale. This spreads your tax liability across multiple years. The approach works if you get at least one payment after the year of sale. Your tax brackets stay lower and cash flow management improves. You'll only report the gain from payments received that year rather than the entire amount. A $5 million business sale might be structured as $1 million yearly for five years. This could lower your overall tax rate. Notwithstanding that, installment sales come with limits. This method won't work for inventory sales or publicly traded securities. On top of that, you must report depreciation recapture as ordinary income in the year of sale whatever your payment schedule. QSBS exclusion for C Corps C corporation owners can exclude up to 100% of capital gains through Section 1202. This applies to qualified small business stock (QSBS) held longer than five years. The exclusion covers $10 million or 10 times your original investment basis, whichever is greater. To cite an instance, a $2 million investment later sold for $22 million could mean excluding the entire $20 million gain. This saves about $4.76 million in federal taxes plus state taxes. Your C corporation must meet these requirements: Charitable giving and 1031 exchanges Donating business interests to charity before selling works well. Moving part of your business to a charitable remainder trust (CRT) or donor-advised fund lets you: A 1031 exchange helps defer capital gains through reinvestment in similar business property. This mainly applies to real-life estate assets in your business. Your investment rolls into new qualified property. Note that charitable donations need planning before any sale agreement becomes final. Both strategies need proper documentation and must follow IRS guidelines strictly. Step 5: Finalize the Deal with Expert Help Your business sale's success depends on proper documentation and compliance. Tax mistakes can get pricey, and even the best-planned exits can fall apart without executing the final steps correctly. Filing IRS Form 8594 for asset sales Asset sales require both buyer and seller to file Form 8594 (Asset Acquisition Statement) with their tax returns for the transaction year. The IRS determines seven asset classes, and this form documents how the purchase price gets split among them. This allocation affects: Cash and general deposit accounts get allocated first, and other assets follow in a specific order. Buyers must use the residual method when their basis in the assets only depends on the amount paid. Avoiding tax surprises at closing Negotiations often hit snags over purchase price allocation. Sellers usually want more value assigned to goodwill because it's taxed at capital gains rates. This beats having value tied to tangible property, which faces ordinary income rates and depreciation recapture. You should take these steps to close smoothly: Working with M&A advisors and tax pros Smart business owners bring in transaction specialists early - usually months before going to market. A qualified tax advisor can help you: Many deals collapse during due diligence because tax problems pop up unexpectedly. Good advisors earn their keep by spotting potential issues before buyers find them. They keep deals moving forward and help you get the full value from your years of hard work. Consult the Best Business Brokers in the US Here. Selling Smart: Final Thoughts on Maximizing Your Business Exit Your business sale marks the pinnacle of years-maybe even decades-of hard work and dedication. Without doubt, protecting your proceeds from excessive taxation stands as a crucial part of this substantial transition. This piece highlights how proper tax planning can make the difference between keeping 50% versus 80% of your sale proceeds. Federal capital gains taxes, state income taxes, depreciation recapture, and the Net Investment Income Tax create a complex tax world that needs careful navigation. Here are the key takeaways: Start your tax planning at least two years before selling-five years would be ideal. Early preparation lets you implement powerful tax-saving strategies that aren't available close to the sale date. Your business structure affects taxation deeply. The choice between an asset sale or stock sale substantially affects your after-tax proceeds. Stock sales usually offer better tax treatment for sellers. Tax minimization strategies like installment sales, QSBS exclusions for C corporations, and strategic charitable giving can help. These approaches legally reduce your tax burden while arranging with your post-sale financial goals. Of course, build a qualified team of advisors including tax professionals, M&A specialists, and financial planners. Their knowledge helps spot potential risks before they affect your transaction. Your business sale represents one of your life's biggest financial events. The investment in proper planning and professional guidance multiplies by preserving the wealth you've built. The final sale price matters less than the money that reaches your bank account when the deal closes. Consult the Best Business Brokers in the US Here. FAQs Q1. How is the tax calculated when selling a business? The tax is calculated based on the difference between your tax basis (original cost plus improvements) and the sale proceeds. This difference is typically subject to capital gains tax, which can range from 15% to 20% at the federal level, plus potential state taxes and a 3.8% Net Investment Income Tax for high-income sellers. Q2. What documents are essential when selling a business? Key documents include detailed profit and loss statements for the past 3-5 years, balance sheets, cash flow statements, 5-year financial forecasts, and all relevant permits and licenses. It's also crucial to have your operating agreement or articles of incorporation ready, as these outline the business's ownership structure and governance. Q3. How do I report the sale of my business on my tax return? You'll need to report the sale on IRS Form 4797 (Sales of Business Property). This form requires information such as the property description, purchase date, depreciation, and cost of purchase. For asset sales, both buyer and seller must also file Form 8594 (Asset Acquisition Statement) with their tax returns for the year of the transaction. Q4. Are there strategies to reduce tax liability when selling a business? Yes, several strategies can help reduce tax liability. These include structuring the sale as an installment sale to spread the tax burden over time, leveraging the Qualified Small Business Stock (QSBS) exclusion for eligible C corporations, and considering charitable giving or 1031 exchanges for certain assets. Q5. How far in advance should I start planning for the sale of my business? It's recommended to start planning for the sale of your business at least two years in advance, with many advisors suggesting a five-year timeline. Early planning allows you to implement more tax-saving strategies, assemble the right team of professionals, and potentially achieve a 20-40% higher valuation compared to businesses with shorter planning timelines. About is a trusted platform providing financial education, business insights, and unbiased reviews. Our mission is to empower small business owners, retirees, and investors to make informed, confident decisions. CONTACT: Ryan Paulson [email protected] SOURCE: IRAEmpire LLC press release
Miami Herald
2 hours ago
- Miami Herald
Kroger To Close 60 Stores Across US: What To Know
Kroger announced plans to close 60 of its supermarkets across the United States over the next 18 months, representing about 5 percent of the Cincinnati-based company's 1,239 Kroger-branded grocery stores across 16 states. The popular grocery retailer revealed the closure plans while reporting first-quarter earnings on Friday but has not specified which store locations will be affected or released a list of impacted stores. Newsweek reached out to Kroger on Saturday via email for comment. Companies close store locations for various reasons. While shifts in consumer shopping behavior and lower demand can cause stores to close, corporations often choose to shutter underperforming locations. Sales dropped slightly to $45.1 billion compared to $45.3 billion for the same period a year earlier according to Kroger earnings data. The move comes as grocery retailers nationwide face mounting pressures from changing consumer habits, inflation, and increased competition from discount chains and online retailers. More than 2,500 store closures are planned across the U.S. this year, according to The Mirror. Kroger expects the 60 store closures to provide a modest financial benefit to the company, according to a regulatory filing. In the first quarter, Kroger recognized an impairment charge of $100 million related to the planned closings. The company indicated that resulting savings will be reinvested into customer experience initiatives across remaining locations. The closures affect Kroger's extensive footprint spanning 16 states, though the company has remained tight-lipped about specific locations. The grocery retailer told CBS MoneyWatch that it will not be releasing a list of the affected stores. This lack of transparency has left employees and customers uncertain about which communities will lose their local Kroger. However, Kroger says it is committed to supporting displaced workers. All employees at affected stores will be offered roles at other Kroger store locations, though details about relocation assistance or wage protection remain unclear. The timing coincides with broader challenges facing traditional grocery retailers. Many chains are grappling with rising operational costs, changing shopping patterns accelerated by the pandemic, and fierce competition from warehouse clubs, dollar stores, and e-commerce platforms. Kroger company statement: "As a result of these store closures, Kroger expects a modest financial benefit. Kroger is committed to reinvesting these savings back into the customer experience, and as a result, this will not impact full-year guidance." Director of Media Relations/Corporate Communications Erin Rolfes told Newsweek in an email response: "In the first quarter, Kroger recognized an impairment charge of $100 million related to the planned closing of approximately 60 stores over the next 18 months." Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, previously told Newsweek: "For some major retailers, 2025 is becoming a year of consolidation. Retail locations that have struggled in recent years to remain profitable due to rising costs and less demand are being shuttered, as companies focus their efforts on more successful stores. The hope is these closures will ultimately produce more fiscal and operational efficiency, but it will come at the cost of customers who favored these locations having fewer options." Michael Ryan, a finance expert and the founder of previously told Newsweek: "These aren't random casualties; they're strategic amputations of unprofitable limbs to save the corporate $15+ minimum wages to supply chain inflation, all crushing their razor-thin margins. Combine this with the march of e-commerce and changing consumer habits post-pandemic, physical retail becomes a luxury many companies can no longer afford." The 18-month closure timeline suggests Kroger will implement the plan gradually, though specific dates and locations remain undisclosed. Related Articles Kroger Responds After Georgia Juneteenth Cakes Go ViralKroger Food Recall Update: Full List of Products ImpactedWhy You're Not Feeling Trump's Egg Price PlungeRodney McMullen Resigns After Personal Conduct Probe, Kroger Shares Fall 2025 NEWSWEEK DIGITAL LLC.
Fox Sports
5 hours ago
- Fox Sports
Qualifying Notes: Kyle Moyer Lands New Job with Arrow McLaren
INDYCAR Kyle Moyer's time as a free agent didn't last long. The veteran team manager who was one of three executives released last month by Team Penske has been hand-picked by Arrow McLaren Team Principal Tony Kanaan to join the Indianapolis-based NTT INDYCAR SERIES program. Moyer will be the organization's director of competition beginning with next week's test at Iowa Speedway. Kanaan and Moyer worked together for years at Andretti Global when Kanaan was a driver. Moyer was the team manager when Kanaan won the INDYCAR SERIES championship in 2004. Moyer left Michael Andretti's team in 2015 to join Roger Penske's organization. Moyer, along with Team President Tim Cindric and Managing Director Ron Ruzewski, were released by Team Penske in advance of the recent Indianapolis 500 presented by Gainbridge after the cars of defending champion Josef Newgarden and Will Power were found with unapproved modifications ahead of qualifying. At Arrow McLaren, Moyer will replace Kanaan as the race strategist for Nolan Siegel, allowing Kanaan to work with all three Arrow McLaren drivers on race weekends. Kanaan told the Associated Press that almost every team in the paddock tried to hire Moyer, but the relationship the two of them have gave McLaren the edge. 'Kyle is one of the best strategists in the paddock, so talking about his qualities, not just about him as a human being, he knows a lot about racing,' Kanaan told the AP. 'Kyle probably is one of the top guys of knowledge of INDYCAR. He's been around it his entire life.' Moyer grew up in Monrovia, Indiana, and was brought into the sport by the Bettenhausen family. Kirkwood Credits Decision Making to Surge Series points leader Alex Palou had the spotlight for most of the first half of the season. A dominant start featured five wins in six races, including an Indy 500 victory, and made him the undisputed championship favorite. But lately, Andretti Global's Kyle Kirkwood has turning heads – and is turning the title tide. Kirkwood has surged to third in the standings, 75 points behind Palou, thanks to wins in the only three races Palou hasn't claimed. Kirkwood had just two wins in his first 53 series races. He now has three wins in the past six races. 'I think he's always been there,' Colton Herta said of his teammate heading into Sunday's XPEL Grand Prix at Road America Presented by AMR (1:30 p.m. ET, FOX, FOX Deportes, FOX Sports app, INDYCAR Radio Network). 'Maybe he's gotten a little bit better at how to race and when to go fast in races, and that just comes (with experience). But I think he's driving pretty similar to last year. He just had bad luck with penalties last year.' Kirkwood agrees the difference isn't raw speed but decision making. He cited last year's fifth-place finish at Road America as an example of when pushed too hard early in the race trying to stave off eventual third-place finisher Scott McLaughlin. The effort backfired and opened the door for McLaughlin and Palou to pass. 'I realized later it was inevitable,' Kirkwood said. 'I pushed too hard too early.' We'll see what he learned from last year. Dixon Penalized for Impeding DeFrancesco Six-time series champion Scott Dixon said he was trying to create a gap to maximize his chances of advancing in qualifying, but race officials said Dixon impeded the hot lap of Rahal Letterman Lanigan Racing's Devlin DeFrancesco during the first round of qualifying. The penalty proved costly to the Chip Ganassi Racing veteran. Rather than advancing to the Fast 12 and perhaps earning a top-10 starting position, Dixon lost his two fastest laps and was reduced to the 25th starting position. Only three times in his career has he started farther back, including 26th earlier this year in the Children's of Alabama INDYCAR Grand Prix at Barber Motorsports Park. He finished 12th in that race. 'It is what it is, man,' he said in ending an interview with FOX's Kevin Lee on pit road. recommended
