What’s the tax on selling a start-up business?

Well, I would hope that from day one of having the idea of the business that you would have chosen the most advantageous legal formation for the business and talked to a really good CPA or tax attorney to get advice about how you could reduce the amount of taxes that you’d pay in the event of a sale.

As others mentioned, without knowing certain information (such as the business formation, depreciation, and assets just to name a few things), you can’t be given a close estimate. As mentioned by Rick and Mark, you’d have to think about the federal rate for $100 million (39.6%) and the tax rate for whatever state the business is domiciled within. It is safe to say that you’d lose close to half (between federal and state) of the $100 million just with the few facts you’ve provided

If you’re thinking about starting a business that you believe could grow to that level of success, it is imperative that you get legal and tax advice ahead of time. This can help you determine the best ways to protect yourself from future taxes. LawTrades is a legal marketplace that could help. We help businesses of all sizes, including those that have raised $200m+ and have attorneys who have worked on deals worth much more. Also – if you’re looking for an answer to your particular situation feel free to try out our service LawTrades Micro, where you’ll get an answer to your question from one of our attorneys within 48 hours for a low flat-rate. Hope to help you soon!

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