What are the key tax considerations when selling my business?

When selling your business, careful tax planning is essential to help lower the costs of the acquisition and minimize taxes for you as the seller. It's critical to understand the difference between short-term and long-term capital gains. Short-term capital gains, which come from assets held for a year or less, are taxed at your regular income tax rate. Long-term capital gains, from assets held for over a year, are taxed at a lower rate, but also include a 3.8% Net Investment Income tax. The structure of the sale—whether it's an asset sale or a stock sale—also has significant tax implications that will affect how much you take home from the deal.