How to Avoid Excessive Double Taxation When Selling Your C Corporation

Did you know you can separate personal goodwill and sell outside of the C Corporation?? Well, you do now.? Here are some quick points to the process.

·?????? Tax strategy for a C Corporation considering an exit that could be structured as an asset sale.? The owner(s) is likely still involved in operations and/or their reputation is still tied to the business.?

·?????? It’s best to hire a professional valuation analyst to conduct a thorough goodwill analysis and provide a certified report.? The report will present a percentage attributable to Personal Goodwill (PGW) and Enterprise Goodwill (EGW).

·?????? What’s the benefit?? PGW is now sold outside of the corporation as an asset of the individual.? The PGW portion is reported on the individual income tax return and subject to capital gains tax, thus avoiding corporate net income tax in the C Corporation.

·?????? Any obstacles?? Buyer agrees to purchase a portion of the assets from the individual and not all from the corporation.? Seller should hire a professional to provide a certified report.?

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