How Much Tax to Pay on 3 Million Sale of Business: Real Numbers, State by State (2026)

The honest answer to how much tax to pay on 3 million sale of business is anywhere from zero to about $1.27M, with the typical no-planning California S-corp seller paying around 37% blended and the typical no-planning Texas seller paying around 23.8%. Two sellers with identical $3M deals can net $1.73M or $2.55M depending on entity type, asset allocation, state of residence, and whether they ran 12 to 24 months of pre-sale planning. The IRC sections that swing the result the most on a $3M deal are Section 1202 (QSBS, up to 100% federal exclusion), Section 338(h)(10) (single-layer S-corp tax), Section 453 (installment deferral), Section 1042 (ESOP rollover), Section 1400Z-2 (Opportunity Zones), and Section 1060 (asset allocation).

What This Actually Means

A $3M sale is a sweet-spot deal in the lower middle market. Big enough that real tax planning is worth doing, small enough that a single seller’s individual return is doing most of the heavy lifting. The federal stack on the gain portion is straightforward: long-term capital gains at 20% (top bracket since 2013), the 3.8% net investment income tax (NIIT) on the same gain under IRC Section 1411, and ordinary income rates on whatever portion of the deal is allocated to depreciation recapture, inventory, working capital, and non-compete payments. The state stack is everything else, and it ranges from zero in Texas, Florida, Nevada, Washington, Wyoming, South Dakota, Tennessee, and Alaska to 13.3% in California, 10.9% in New York, 10.75% in New Jersey, and 9.9% in Oregon (Tax Foundation 2026 state rate report).

“How much tax” also depends on what is being sold. A $3M stock sale of qualifying C-corp stock held 5+ years can be fully excluded under Section 1202 ($10M cap per shareholder), meaning zero federal tax on the entire $3M of gain. A $3M asset sale of an S-corp with heavy depreciated equipment can generate $300K to $600K of ordinary-income recapture even before the capital gains analysis starts. A $3M C-corp asset sale gets hit twice, once at the entity level (21% corporate rate) and again on the distribution to the shareholder (23.8% qualified dividend plus NIIT, or 37% ordinary plus NIIT depending on how it comes out). The shape of the deal matters as much as the size.

One more framing point: the right comparison is not “tax versus no tax” but “tax with planning versus tax without planning.” A seller who walks into a deal with no planning leaves money on the table. A seller who runs 12 to 24 months of pre-sale planning, with a tax advisor who understands the M&A code sections, typically cuts the original tax by 30% to 50% on a $3M deal, and in the right cases (QSBS, full Section 1042 rollover, full Opportunity Zone reinvestment) cuts it to zero. The number quoted in the headline is the number that comes after the planning, not before.

The Six Things You Need to Understand About Tax on a $3M Sale

1. Entity Type Drives the Tax Stack

Current state: The business is operating as an S-corp, C-corp, LLC taxed as partnership, LLC taxed as S-corp, or single-member LLC (disregarded). Target state: Know which layer of tax applies before structuring the deal. Impact: The same $3M sale can produce $715K of tax (S-corp, Texas), $1.1M of tax (S-corp, California), $1.1M of tax (C-corp asset sale, anywhere), or $0 of tax (C-corp QSBS stock sale).

S-corps and LLCs taxed as partnerships are pass-through entities. The sale, whether structured as a stock sale or an asset sale, generates one layer of tax that lands on the individual shareholders or members. C-corps are not pass-through. A C-corp asset sale generates a corporate-level gain taxed at the 21% federal rate (since the Tax Cuts and Jobs Act of 2017), and then the cash distributed to shareholders generates a second layer of tax, either as a qualified dividend at 23.8% (capital gains plus NIIT) or as ordinary liquidation distribution depending on how the wind-down is executed. The double tax on a C-corp asset sale is exactly why most lower-middle-market deals use S-corp stock sales with a Section 338(h)(10) election to get the buyer the asset-sale tax treatment without the double tax (AICPA M&A Tax Practice Guide).

2. The Allocation of the $3M Across Asset Classes

Current state: The deal is an asset sale (or an S-corp stock sale with a 338(h)(10), which is treated as an asset sale for tax purposes). The total $3M purchase price has to be allocated across the seven asset classes defined in IRC Section 1060 and reported on Form 8594. Target state: Maximize allocation to Class VI (intangibles other than goodwill) and Class VII (goodwill), both of which are taxed at capital gains rates. Minimize allocation to Class V (depreciable tangible property), which triggers Section 1245 and Section 1250 ordinary-income recapture. Impact: Moving $200K from depreciated equipment (37% ordinary recapture) to goodwill (20% capital gains) saves $34K of federal tax on a single line item.

A typical $3M small-business asset sale allocation looks like this: goodwill $1.8M (60%, capital gains), customer relationships $400K (capital gains), equipment $200K (depreciation recapture, ordinary), working capital $400K (ordinary), inventory $100K (ordinary), non-compete $100K (ordinary). The capital-gains portion is $2.2M and the ordinary portion is $800K. Federal long-term capital gains on $2.2M is $440K (at 20%). Federal ordinary on $800K is $296K (at 37% top bracket). NIIT on $2.2M is $84K (at 3.8%). State tax on $3M ranges from $0 in Texas to about $399K in California. The federal total before state lands near $820K (Texas) and the all-in California number lands near $1.22M.

3. State of Residence Swings the Number by $400K or More

Current state: The seller has been living in California, New York, New Jersey, Oregon, Minnesota, or any of the other 5%-to-13.3% top-bracket states. Target state: If pre-sale planning permits, establish bona fide residency in Texas, Florida, Nevada, Washington, Tennessee, South Dakota, Wyoming, or Alaska 12 to 18 months before close. Impact: On a $3M deal with $2.6M of taxable gain, dropping from California’s 13.3% top rate to zero saves about $346K of state tax. Dropping from New York’s 10.9% saves about $283K.

The residency move has to be real. The California Franchise Tax Board and the New York Department of Taxation and Finance both run aggressive residency audits on departing high-net-worth sellers. The criteria they apply include physical presence (the 183-day count plus the closer-connection test), location of family members, primary residence, drivers license, voter registration, doctors, dentists, club memberships, vehicle registrations, and where the seller’s mail is sent. Domicile, the deeper test, asks where the seller intends their permanent home to be. Sellers who keep their California house “for the grandkids” and visit twice a quarter usually lose the audit. Sellers who fully relocate, sell or rent the old house, register everything in the new state, and rebuild their day-to-day life there usually win.

4. QSBS Section 1202 Can Make the Whole Tax Disappear

Current state: The seller holds C-corp stock that was issued after August 10, 1993, has been held for at least 5 years, was originally issued when the company’s gross assets were $50M or less, and the company is in a qualified trade or business (not services, finance, farming, hospitality, mineral extraction). Target state: File Form 8949 with the Section 1202 exclusion claimed. Impact: Exclude up to $10M (or 10x the seller’s basis, whichever is greater) of federal capital gains. A $3M sale of fully qualifying QSBS produces $0 of federal capital gains tax. At the 23.8% federal capital-gains-plus-NIIT rate, that is roughly $714K of federal tax saved on a single seller.

QSBS is the highest-impact planning move on a $3M deal when it applies. Each shareholder gets their own $10M cap, so spouses, children, and trusts that hold qualifying stock each can claim a separate exclusion (a technique sometimes called QSBS stacking). The traps: the corporation must be a C-corp at the moment of original issuance and through the 5-year hold; conversions from LLC or S-corp into C-corp restart the holding-period clock from the conversion date; and the gross-assets test is checked at the moment of issuance, not later, so a company that grew past $50M after issuance can still qualify. Per IRC Section 1202, the 100% exclusion applies to stock acquired after September 27, 2010 (Tax Cuts and Jobs Act made that exclusion permanent).

5. Installment Sale Under Section 453 Spreads the Tax Across Years

Current state: The seller is taking a portion of the $3M as a promissory note paid over 3 to 10 years. Target state: Default treatment under Section 453 is automatic installment reporting unless the seller affirmatively elects out on Form 6252. Impact: Capital gains tax is recognized pro-rata as principal payments are received, matching tax to cash. On a $3M sale with $1M cash at close and $2M paid over 5 years, the seller pays federal capital gains on only the $1M in year one and smooths the rest across years two through six.

The traps on Section 453 are real. First, depreciation recapture under Section 1245 and Section 1250 is fully taxable in the year of sale even if no cash is received that year. On a $3M deal with $300K of equipment recapture, the seller owes ordinary income tax on the full $300K in year one regardless of how the cash is split. Second, for installment notes above $5M aggregate the seller owes an annual interest charge under Section 453A on the deferred tax at the federal underpayment rate. A $3M deal usually stays well under that threshold. Third, if the seller later sells or pledges the note, the deferred gain accelerates. The installment structure works best when the buyer’s credit is solid and the seller has no need for all the cash up front.

6. ESOP Sale With Section 1042 Rollover Defers Indefinitely

Current state: The seller owns C-corp stock (or is willing to convert from S-corp to C-corp before the sale) and the company has enough employees to absorb beneficial ownership. Target state: Sell at least 30% of the company to a newly formed Employee Stock Ownership Plan (ESOP), and within 12 months reinvest the proceeds into Qualified Replacement Property (QRP, generally US operating-company stocks or bonds). Impact: Indefinite deferral of all capital gains tax on the ESOP-sold stock under Section 1042. If the QRP is held until the seller’s death, the basis steps up and the deferred gain is wiped out entirely.

ESOPs take 12 to 18 months to install, including ESOP trustee selection, ERISA valuation, financing structure (seller note plus bank debt is the usual stack), and tax counsel sign-off on the Section 1042 election. The economic trade is real: the seller takes a 5% to 15% price discount versus a third-party sale, but in exchange gets indefinite tax deferral and the option to keep running the company. For a $3M deal where the seller has no obvious strategic buyer and a workforce they want to reward, a 100% ESOP with Section 1042 rollover can be the highest after-tax outcome on the menu. For more detail on how the post-sale operation works, see what happens when an ESOP company sells.

Three Quick-Reference Scenarios for a $3M Sale, No Planning

The numbers below assume the seller did no pre-sale planning, the deal is structured as a straightforward asset sale (or S-corp stock sale with 338(h)(10) election), and the seller is in the top federal bracket. Federal rates are 20% LTCG plus 3.8% NIIT plus 37% ordinary for the recapture and ordinary buckets. State rates are top-of-bracket 2026 figures from the Tax Foundation. These are pre-planning baselines, not optimized outcomes.

The C-corp asset sale row is the worst outcome by far for any deal that does not also qualify for QSBS. The 21% federal corporate tax on the entity-level gain plus 23.8% qualified dividend tax on the distributed proceeds compounds to roughly 39.8% combined federal, before state. This is why almost every modern lower-middle-market deal in the $1M to $20M range structures around either an S-corp sale with a 338(h)(10) election or a stock sale of qualifying QSBS. C-corp asset sales without QSBS are usually the result of a planning failure, not a planning choice.

Worked Example: Dr. Smith Sells a $3M California Dental Practice

Dr. Smith owns 100% of a California dental practice operated as an S-corp. The practice generates $1.4M of revenue and roughly $800K of seller’s discretionary earnings (SDE). A buyer offers $3M (3.75x SDE, in line with the 3.5x to 4.5x band that dental practices in the $500K to $1M SDE range typically clear, per the 2025 American Dental Association practice transitions report). The deal will close as an S-corp asset sale with a 338(h)(10) election, allowing the buyer the basis step-up and 15-year goodwill amortization while keeping Dr. Smith on a single layer of tax.

The Form 8594 allocation looks like this: goodwill $1.8M, customer relationships $400K, equipment $200K (originally cost $400K, now fully depreciated, so the full $200K is Section 1245 recapture), working capital $400K, inventory $100K (supplies on hand), non-compete $100K. The capital-gains portion (goodwill plus customer relationships plus a basis-adjusted equipment piece) lands near $2.2M. The ordinary-income portion (recapture, working capital, inventory, non-compete) lands near $800K.

Scenario A, no planning, California resident: Federal LTCG on $2.2M at 20% is $440K. Federal NIIT on $2.2M at 3.8% is $84K. Federal ordinary on $800K at 37% is $296K. Federal total is $820K. California tax on the full $3M at the 13.3% top bracket is $399K (California does not distinguish between capital gains and ordinary income at the state level). Total tax is $1.22M. Net to Dr. Smith is $1.78M. Effective rate is 40.7%.

Scenario B, residency relocation to Texas 18 months before close: Same federal $820K. State tax drops to $0. Total tax is $820K. Net is $2.18M. Effective rate is 27.3%. Savings versus Scenario A: $399K. The audit risk is real, and the move has to be genuine; Dr. Smith sells the California house, registers everything in Texas, and physically lives in Texas through the close and beyond.

Scenario C, Texas resident plus Section 453 installment over 5 years plus partial CRT: $1M cash at close, $1.5M installment note over 5 years at the AFR, $500K of equity contributed to a 20-year charitable remainder trust before signing. Federal tax in year of close drops to about $400K (most of the ordinary recapture is still due in year one, but the capital gains on the note portion defers, and the $500K in the CRT escapes capital gains entirely inside the trust). The CRT generates a charitable income tax deduction worth about $75K to $120K (depending on the seller’s age and the unitrust payout percentage). Total tax across the deferral window lands near $650K. Net is $2.35M plus future annuity income from the CRT. Effective rate, blended, lands near 21%.

Scenario D, full QSBS C-corp stock sale (hypothetical, if Dr. Smith had been operating as a C-corp for 5+ years): Federal capital gains tax: $0. Federal NIIT: $0. State tax in California: $399K (California does not conform to Section 1202 and taxes the gain in full at the state level). Total tax: $399K. Net to Dr. Smith: $2.60M. Effective rate: 13.3%. If Dr. Smith were instead a Texas C-corp QSBS holder, the total tax would be $0 and the net would be $3.00M. The 5-year holding requirement is the critical gate; the planning had to start in year minus five.

The spread between Scenario A ($1.22M of tax, $1.78M net) and the optimized scenarios C and D ($650K to $0 of tax, $2.35M to $3.00M net) is the entire point of pre-sale tax planning. The gap is $600K to $1.2M of after-tax cash on a single $3M deal. The work to capture that gap is 12 to 24 months of advisory engagement at $25K to $75K of professional fees, which is a 10x to 50x return on the planning spend.

When the Tax on a $3M Sale Is Actually Zero

Most sellers assume some federal tax is unavoidable. On a $3M deal, three structures can drive the federal tax to zero. None of them are tricks. All three are explicitly in the Internal Revenue Code.

Full QSBS Section 1202 exclusion: $3M of qualifying C-corp stock held 5+ years generates $0 of federal capital gains tax. The $10M per-shareholder cap is far above $3M, so the entire gain is excluded. State tax may still apply (California, New Jersey, and a few other states do not conform to Section 1202), but the federal tax is zero.

Full Section 1042 ESOP rollover: 100% sale of qualifying C-corp stock to an ESOP, with all proceeds reinvested in Qualified Replacement Property within 12 months, produces indefinite federal deferral. If the QRP is held until death, the deferred gain is wiped out by the basis step-up at death under Section 1014. Net federal tax over the seller’s lifetime: zero.

Full Section 1400Z-2 Opportunity Zone reinvestment plus 10-year hold: Roll the full $3M of gain (or the portion the seller wants to defer) into a Qualified Opportunity Fund within 180 days of recognition. The original deferred gain is recognized at the end of the deferral window (December 31, 2026 or 2027 under the current statute as extended). If the QOF interest is held for 10 years, all appreciation inside the fund comes out federally tax-free. The original gain is not zeroed, but the new gain inside the fund is.

The combination of strategies matters more than any single one. A seller doing a $3M QSBS sale with simultaneous residency in Texas pays zero federal and zero state. A seller doing a $3M ESOP rollover plus residency relocation and a CRT for charitable intent can come close to the same outcome with different cash-flow timing. The right structure depends on the seller’s post-sale goals (cash, deferred income, charitable intent, family wealth transfer, continued involvement in the business), and the planner’s job is to match those goals to the right Code sections.

Common Mistakes Sellers Make on $3M Deals

Treating Tax Planning as a Post-LOI Conversation

The single most common mistake is waiting until the letter of intent is signed to call the tax advisor. Most of the high-value Code sections require 12 to 24 months of pre-sale work: QSBS needs a 5-year hold, Section 1042 needs the ESOP installed, residency relocation needs the 183-day count, IDGT and GRAT gifts need to happen before any binding sale commitment, and CRT contributions need to precede the purchase agreement to survive assignment-of-income scrutiny. Once the LOI is signed, the planning window has effectively closed for everything except Section 453 installment treatment and Section 1060 allocation negotiation.

Accepting the Buyer’s First Allocation

Buyers want as much of the $3M allocated to depreciable equipment and amortizable intangibles (Class V and Class VI under Section 1060) because those generate the fastest deductions. Sellers want as much as possible allocated to goodwill (Class VII, capital gains rate) because the rate spread is 17 percentage points. The Section 1060 allocation is negotiable. The buyer’s draft purchase agreement will quietly push 30% to 40% of the deal into depreciable property unless the seller’s counsel objects. On a $3M deal, every $100K shifted from ordinary to capital gains saves $17K of federal tax. For more on how this plays out, see the guide on reducing tax liability for a small business sale.

Forgetting About Depreciation Recapture

Sellers who have taken Section 179 expensing or bonus depreciation on equipment over the years are sitting on a recapture liability that gets paid back at ordinary income rates at sale, not at the lower capital gains rates. A $3M deal with $300K of fully depreciated equipment generates $300K of ordinary income on top of the capital gains. At the 37% top federal bracket, that is $111K of federal tax, plus state. The recapture is unavoidable; the planning question is whether to allocate less to equipment (within Section 1060 fair-market-value constraints) and whether to spread the rest of the gain across multiple years to keep the seller out of the top bracket every year.

Believing the Installment Sale Defers Everything

Section 453 defers capital gains pro-rata across principal payments. It does not defer depreciation recapture, which is fully due in the year of sale even if no cash arrives that year. Sellers who structure a $3M deal as $500K cash plus $2.5M of installment note, then discover they owe $100K to $200K of federal tax in year one on phantom recapture income, are a recurring case at every M&A tax practice. The fix is to negotiate enough cash at close to cover the year-one tax bill, or to allocate less to depreciable property in the Section 1060 worksheet.

Skipping the State Conformity Analysis

California, New Jersey, Pennsylvania, and a handful of other states do not conform to Section 1202 (no state-level QSBS exclusion), do not conform to Section 1042 (no state-level ESOP deferral), or have their own quirks around installment reporting. A $3M deal that produces $0 of federal tax under QSBS still produces $399K of California state tax. Sellers who do not check state conformity before declaring victory on the federal side end up shocked at the state return. The conformity check is a five-minute conversation with a state-tax specialist that should happen before any planning is finalized.

Doing the Math on Pretax Dollars Instead of After-Tax

Two $3M offers are not equivalent if one is structured as all cash, all asset sale, all ordinary buckets, and the other is structured as QSBS stock plus a small consulting agreement. The first might net the seller $1.78M; the second might net $2.70M. Sellers who pick the deal that looks bigger on paper without running the after-tax math regularly leave $400K to $1M on the table. Every deal evaluation should run a side-by-side after-tax model before the LOI is signed.

Timeline: From Planning to After-Tax Cash on a $3M Sale

The schedule below is the realistic path for a seller targeting a $3M close with full pre-sale planning. Shorter timelines are possible, but each Code section has its own hard deadline, and shaving months off the front end usually means giving up one or more planning levers.

Month minus 60 (5 years before close): If QSBS is on the table, the C-corp must already be formed, the stock must already have been issued, and the gross assets test must already have been met. Sellers who think QSBS during the planning phase but cannot get the 5-year hold simply do not have QSBS available for this deal. The hold clock is unforgiving.

Month minus 24: Begin residency relocation if planning to move from a high-tax state to a no-income-tax state. Sell or rent the high-tax-state primary residence. Register vehicles, drivers license, voter registration, doctors, dentists, and primary mailing address in the new state. The 183-day count begins on the first full day of the new tax year.

Month minus 18: Begin ESOP feasibility analysis if pursuing Section 1042 rollover. Engage ESOP trustee, ERISA counsel, and ESOP-focused financial advisor. Negotiate seller-note and bank-debt financing stack. The ESOP installation itself takes 9 to 12 months from feasibility to first day of operation.

Month minus 12: Complete any GRAT or IDGT equity gifts before the LOI is on the table. Late gifts get collapsed under the assignment-of-income doctrine. Engage business appraiser for the formal valuation that supports any minority-interest discounts.

Month minus 6: Engage M&A advisor, run buyer outreach, generate LOI. Build the tax structure (entity election, asset allocation, installment vs cash mix, CRT contribution if applicable) into the LOI itself, not as a side conversation. CT Acquisitions runs this phase with the tax structure baked into the buyer-paid engagement.

Month minus 3: Negotiate the Section 1060 allocation. Push back on any buyer draft that allocates more than 10% to 15% to depreciable equipment unless the equipment is genuinely worth that. Document the goodwill valuation. Sign the purchase agreement with the Form 8594 allocation locked in.

Month 0 (close): Wire instructions executed. File Section 338(h)(10) election if applicable (deadline is 8.5 months after close). File Form 8949 with Section 1202 exclusion claimed if applicable. File Form 8997 for Opportunity Zone deferral if applicable. Confirm Section 1042 reinvestment window starts ticking (12 months from close).

Month 1 to month 12: Complete any Section 1042 QRP reinvestment. File Form 6252 for installment reporting if applicable. Track Section 453A interest if installment notes exceed $5M aggregate.

Year 1 tax return (April of year following close): Recognize federal capital gains, NIIT, ordinary recapture, and state tax (if any) on the year-one portion of the deal. Future years recognize the installment portion as it is received.

Frequently Asked Questions

How much tax do I pay on a $3M business sale in California?

Without planning, the typical California S-corp asset seller pays about $1.22M in combined federal and state tax on a $3M deal, leaving about $1.78M net. The federal stack is roughly $820K (LTCG plus NIIT plus ordinary on the recapture portion) and California adds about $399K at the 13.3% top bracket. With pre-sale planning (residency relocation, Section 453 installment, asset allocation optimization), the total tax can come down to $650K to $800K, leaving $2.20M to $2.35M net.

What is the tax on $3M business sale in Texas, Florida, or another no-income-tax state?

The federal tax is about $820K on a typical S-corp asset sale, leaving $2.18M net. State tax is $0 in Texas, Florida, Nevada, Washington, Tennessee, South Dakota, Wyoming, and Alaska. The effective rate lands near 27% versus 40% in California. If the deal qualifies for QSBS under Section 1202, the federal tax can drop to $0, leaving the full $3M net to the seller.

Can I pay zero federal tax on a $3M sale?

Yes, in three documented structures: full QSBS Section 1202 exclusion on qualifying C-corp stock held 5+ years; full Section 1042 ESOP rollover into Qualified Replacement Property held until death; or full Section 1400Z-2 Opportunity Zone reinvestment held for 10 years. Each requires advance planning (5 years for QSBS, 12 to 18 months for ESOP, 180 days from gain recognition for OZ). State tax may still apply depending on jurisdiction.

Does the buyer pay any of the tax on the sale?

No, the seller pays the tax on the gain. The buyer’s tax position is the mirror image: the buyer gets a stepped-up basis on the assets purchased in an asset sale (or in an S-corp stock sale with a 338(h)(10) election), which produces tax deductions for the buyer over 15 years on goodwill and faster on equipment. The buyer’s gain from the step-up is often reflected in a 5% to 15% price premium versus a straight stock sale, which is how the buyer “pays” for the structure indirectly.

What if I take the $3M as an installment note instead of cash at close?

Under Section 453, capital gains tax on the note portion is deferred until the principal payments are received. On a $3M deal with $1M cash and $2M installment over 5 years, the seller pays federal capital gains on $1M in year one and the rest pro-rata across years two through six. Depreciation recapture under Section 1245 and Section 1250 is fully due in the year of sale even if no cash arrives that year, so a portion of the tax bill cannot be deferred. The IRS underpayment-rate interest charge under Section 453A only applies if total deferred installment notes exceed $5M aggregate.

Do I need a tax attorney or is a CPA enough for a $3M deal?

For a $3M deal, the right team is usually a CPA who specializes in M&A taxation and a tax attorney who handles the Section 338(h)(10) election, the Section 1060 allocation negotiation, and any QSBS or Section 1042 documentation. The combined professional fees on a $3M deal typically run $25K to $75K. The after-tax savings from competent planning on a $3M deal usually run $400K to $1M, so the return on the professional spend is 10x to 50x. Sellers who try to do the planning themselves with general-practice CPAs almost always miss at least one significant lever.

What to Do Next

The number on a $3M sale is not fixed. Two sellers with identical businesses can walk away with $1.78M or $2.55M depending on entity type, allocation, state, and timing. The work to capture the gap is 12 to 24 months of pre-sale planning at $25K to $75K of professional fees, returning $400K to $1M of after-tax cash. The most expensive mistake on a $3M deal is treating tax planning as a post-LOI conversation. By the time the buyer’s draft purchase agreement is on the table, three-quarters of the planning levers have already closed.

CT Acquisitions runs sell-side mandates with the tax structure baked into the engagement from day one. The Section 1060 allocation, the 338(h)(10) decision, the installment-vs-cash split, the residency timeline, and (where applicable) the QSBS or Section 1042 framework all sit inside the LOI before the seller signs. Buyers pay our fee, not sellers. The result is that the seller’s after-tax cash is the metric we are optimizing, not the headline purchase price.