Selling business - Capital gains URGH!

[Dillydally]

I am likely selling my business this year in California. The sale will trigger long term capital gains for Fed taxes, and a large jump in income for the state taxes. I am looking for any ideas on reduction or deferment. I have read everything that comes up from a quick Google search... All ideas welcome. The business is not real estate based and does not have any real estate assets.

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[GilesMM]

How about a structured settlement?

[mistymoney]

owner financing? spred payment over 3-5 years?

[reeshau]

Do you have any investments with losses?  Realize those losses now.  You can buy back in 31 days.

Start a donor-advised fund for future charitable giving.

Bunch up your other tax deductions.  Get all the elective medicine you might want.  Pay next year's property taxes, not just this year's.

Spreading out gains over several years is generally a good move.  However, if the capital gains rates expire with the expiration of the TCJA in 2025, then the rate could increase, depending on how much you are talking about.

Eat it.  Enjoy the gain you are taxed on.  Know that in 8 months' time, it would likely have been more.

[Dillydally]

How about a structured settlement?

A great idea that I have already begun to explore...

[Dillydally]

owner financing? spred payment over 3-5 years?

A great idea, but poses a default risk that I am not willing to take on. A structured settlement accomplishes the same outcome, without the default risk...

[Dillydally]

Do you have any investments with losses?  Realize those losses now.  You can buy back in 31 days.

Start a donor-advised fund for future charitable giving.

Bunch up your other tax deductions.  Get all the elective medicine you might want.  Pay next year's property taxes, not just this year's.

Spreading out gains over several years is generally a good move.  However, if the capital gains rates expire with the expiration of the TCJA in 2025, then the rate could increase, depending on how much you are talking about.

Eat it.  Enjoy the gain you are taxed on.  Know that in 8 months' time, it would likely have been more.

Excellent list of things to consider. Increased capital gains rate 2026 would definitely derail the net benefits of deferment. Prepaying property tax might be genius.

[Dicey]

Do you have any investments with losses?  Realize those losses now.  You can buy back in 31 days.

Start a donor-advised fund for future charitable giving.

Bunch up your other tax deductions.  Get all the elective medicine you might want.  Pay next year's property taxes, not just this year's.

Spreading out gains over several years is generally a good move.  However, if the capital gains rates expire with the expiration of the TCJA in 2025, then the rate could increase, depending on how much you are talking about.

Eat it.  Enjoy the gain you are taxed on.  Know that in 8 months' time, it would likely have been more.

+1 to opening a DAF. I did it with a small inheritance, which included a 401k. I went with Fidelity,  based on forum advice. It's been more fun than I ever expected. It's super easy to send checks, and record keeping is a breeze.