For business owners looking to sell their company, there are more factors to consider than simply finding the right buyer at the right price. To accomplish a successful transaction, goals should be set to define what success is. For some sellers, success may be maximizing cash at the closing of the transaction. For others, generational planning, maintaining or enhancing lifestyle, or charitable giving may be more important. In all scenarios, pre-liquidity planning and a robust financial strategy are crucial for achieving the desired outcome. In this article we outline five considerations to address prior to selling to help minimize taxes and realize a successful transaction: structure, legacy, charity, cash flow, and risk management.


Liquidity to a seller can be impacted by the corporate structure of the company and how the transaction is structured.

  • QSBS Exclusion – Some U.S.-based C-Corporations may be eligible for the Section 1202 Qualified Small Business Stock (QSBS) capital gains exclusion. Exercising this option allows sellers to potentially exclude up to 100% of their federal capital gains tax up to $10 million.
  • Asset vs. Stock Sale – During the sell-side process, treating the transaction as a stock sale is more beneficial to a seller than an asset sale, which benefits the buyer. An experienced advisor can negotiate on behalf of a seller to push for a stock sale of the company to avoid higher ordinary income tax levels and bypass double taxation for C-corporations.
  • F-Reorganization – If a buyer is not able to treat the transaction as a stock sale, an F-reorganization provides an alternative solution. A corporate restructuring of the company prior to a sale, through an F-reorganization, essentially allows the seller to treat the transaction as a stock sale while the buyer may be able to treat it as an asset sale.


For some sellers, being able to create a legacy is paramount to achieving success. A number of options are available to reach this goal and maximize what can be passed down to future generations.

  • IDGT – An Intentionally Defective Grantor Trust (IDGT) is a special type of irrevocable trust that allows a grantor to segregate income tax from estate tax. A business owner can sell a portion of his or her company to the trust. The seller can then receive income from the trust and pay income tax personally rather than depleting trust assets for taxes. The assets within the trust, and any appreciation of those assets, are excluded from the seller’s estate and can be passed to other generations without incurring any estate taxes.
  • GRAT – Grantor Retained Annuity Trusts can be used by a seller to receive fixed-amount payments from the trust for a set term and gift the remaining assets in the trust at the end of the term to named beneficiaries. This can all be done while using little, if any, federal gift and estate tax exemptions.
  • ING – Incomplete Non-Grantor (ING) trusts are most beneficial to individuals in high income tax states. Income in an ING trust is taxed at the trust level. The trust can be established in a state with no income tax, significantly reducing tax liability. Transfers to an ING trust are deemed “incomplete,” meaning immediate gifting taxes can be avoided. Assets in an ING trust are included in the individual’s estate, making them eligible for a step-up in basis upon death.
  • Lifetime Giftable Amount – In 2024, there is a $13.61 million lifetime gift tax exemption for individuals, meaning estates worth more than $13.61 million will incur federal estate taxes. There is a possibility that this exemption amount will be lowered to around $6 million by 2026. Proper planning can assist in maximizing the benefit of the current provisions.


Business owners that have recently sold their company are able to act on their philanthropic desires with new liquidity. Many vehicles exist to do this in tax-efficient ways.

  • CRT – Business owners can gift a portion of their company to a Charitable Remainder Trust (CRT) and take a partial tax deduction at the time of the gift. A fixed income will be drawn from the trust for a set term and capital gains taxes on the company’s appreciation are delayed until these payments are made. Once the trust term has expired, the remainder of the trust’s assets are gifted to one or more charitable organizations of the business owner’s choosing.
  • CLT – A Charitable Lead Trust (CLT) effectively works opposite to a CRT, with income going to a charitable organization and the remainder of the trust’s assets going to the grantor or a beneficiary. A business owner funding a CLT would receive an immediate charitable income tax deduction, avoid capital gains taxes upon the sale, and remove taxable assets from the estate.
  • DAF – Donor Advised Funds (DAFs) are a low-cost vehicle for charitable giving that business owners can use to maximize tax deductions, avoid excise taxes or other restrictions, and reduce the taxable amount of the estate. A portion of the business interest can be gifted to the DAF that will benefit qualified charities and fund grants at the owner’s recommendation.

Cash Flow

Many business owners become accustomed to a certain lifestyle when running a company. Being able to maintain the same lifestyle after the cash flow of the business is gone can be an adjustment.

  • Inflation – Liquidation from recently selling a company can create a significant amount of cash for business owners. To combat inflation and maximize the value of the business exit, this cash could be put to work in a strategic investment portfolio.
  • Income – Without cash flow from the company, a recently-exited business owner should find income-generating investments. An experienced advisor can help implement a strategic investment plan post-transaction that can allow entrepreneurs to continue, or even enhance, their way of life without the worry of depleting their pool of wealth.
  • Alternative Investments – Sophisticated advisors have access to alternative investments that can complete a more complex portfolio, adding to the traditional allocation of stocks and bonds. Real estate, private equity, private credit, and hedge funds are a few options that can provide diversification and solve more complicated objectives for business owners with new liquidity.

Risk Management

A bolstered personal balance sheet means more assets to protect. Proper risk management plans can evaluate current and future needs for adequate coverage.

  • Life – A life policy will help set up a spouse or children, that may be dependent upon a business owner and their support, in the event of an untimely death.
  • Disability – In the event than an individual become incapacitated or disabled, a disability policy can provide support for dependents.
  • Liability – A personal liability policy can protect a business owner and their assets against an accident for which they are held responsible.
  • Umbrella – An umbrella policy prevents claimants from taking more personal assets in excess of amounts covered by a liability policy. For business owners that have large amounts of new assets after a sale, an umbrella policy can protect them from others who may try to lay claim to this new wealth.

There are many considerations when it comes to selling your company. A comprehensive plan for a liquidity event requires experienced advisors to give guidance in the areas that might be overlooked. From preparing a company for sale, establishing personal and family goals for after an exit, through the completion of a transaction, Crewe’s professionals have the expertise to navigate this roadmap. If you would like to learn more about how Crewe can help prepare you for a capital transaction, we would be happy to discuss your current situation.