More small businesses have been sold in recent months because of the increase in the economy and the rising number of investors who are looking to diversify their portfolio. People with investment capital are now looking for positive investments outside of the stock market.
Building on a successful business enterprise is one form of alternative investment that can have significant financial and other rewards when it comes time to move on. Not all of the money goes to the business owner in the event of a sale, however. Business owners often have a shadow partner in the government who wants a portion of the sale proceeds.
When an individual business owner sells a company, they are at a disadvantage tax wise. However, there are some tax advantages that can benefit you if you decide to pass on philanthropically. Saving federal tax on a business sale without any unnecessary conflict requires using a charitable tax planning structure. For those individuals who have access income and are ultra-wealthy, charitable trusts can help with estate planning value and income tax value. Putting together a private charitable foundation, such as the Gates Foundation, enables them to pass along large amounts of business property or interests while receiving an income charge deduction, keeping control of the donated property in some sense, and avoiding estate tax.
For business owners as well as investors who are looking for the tax advantages and a continuing income, alternative planning structures need to be identified as soon as possible.
