fbpx

Selling Your Business to Avoid Tax Increase in Williamsburg, Virginia

1046494-Royalty-Free-RF-Clip-Art-Illustration-Of-A-Cartoon-Rhino-Hanging-On-A-Branch-On-A-Cliff

A looming increase in the capital-gains tax rate next year is fueling sales of some privately-held businesses.

So little time, yet so much to do!  That seems to be the theme as we near the end of 2012. Hopefully Congress will get to work and hammer out a deal to avoid the “fiscal cliff” (and trigger another recession).

Regardless, it certainly looks like 2013 still won’t be quite as advantageous as the current tax code. This especially is the case if you’re looking to make a major sale that will invoke capital gains taxation. Accordingly, you’d better get to work and get that sale completed before the ball drops in Times Square!

For business owners considering the sale of their businesses, this advice includes you. In fact, you will be interested in a recent article in The Wall Street Journal titled “Looming Tax Hike Motivates Owners to Sell.”

As you likely know, the first tsunami to hit will be the automatic relapse in the tax code to pre-Bush era days, with an effective increase in capital gains taxation from a current 15% to a less advantageous 20%. And it gets worse: the Affordable Care Act (Obamacare) tacks on an extra 3.8% to capital gains that also goes into effect next year. Bottom line: capital gains will increase to 23.8% (that’s an increase of almost 60%!).

It’s yet to be seen what the lame-duck Congress will do with their time or how they’ll solve this problem. But it seems unlikely that Obamacare and that extra 3.8 % surcharge is going anywhere. That alone is enough to encourage some business owners to advance their sale dates to 2012.

It might already be too late to sell your business. Nevertheless, there may be time yet or other transfers besides. Looking for an example? Well it’s worth noting that George Lucas didn’t wait until January to sell his company, Lucasfilm, to Disney, potentially shaving $176 million off his would-be tax bill.

You can learn more about this topic as well as other strategies on our website under the tab entitled:  business succession planning in Williamsburg, Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.

References: The Wall Street Journal (November 1, 2012) “Looming Tax Hike Motivates Owners to Sell

The Trust Advisor (November 4, 2012) “Disney Deal Gives George Lucas a Billion-Dollar Tax Break

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment

LIKE THIS POST?

We have a LOT more where that came from!

We hate spam too. We will never share or sell your information.

Call Now ButtonCall Us Now https://jsfiddle.net/7h5246b8/

Request a free consultation

We hate spam too. We will never share or sell your information.

We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Coronavirus/Covid-19
Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.