Article
Key tax considerations when selling your c corporation
May 14, 2025 · Authored by Jon Blitman, Matt Kaden
Selling a closely held C corporation is a momentous event for founders and shareholders who have devoted their time and resources to growing the business. However, the stakes are high: tax consequences, future liabilities, and maximizing value all come into play.
For owners and management of closely held C corporations, deciding to sell the business isn’t a simple matter of finding a willing buyer and closing the deal. The push and pull between asset and stock sales entails critical tax, legal, and practical considerations.
Key among these are:
- The buyer’s eagerness to acquire a basis step-up.
- The seller’s drive to reduce double taxation.
- The possibility of using Net Operating Losses (NOLs) and other attributes to reach a mutually beneficial compromise.
- Section 382/383 limitations that might curtail the use of carryforwards post-transaction.
- The inheritance of tax liabilities in a stock acquisition.
Proactive planning, detailed modeling, and thoughtful negotiation strategies can transform these hurdles into opportunities. By engaging experienced tax advisors, understanding the interplay of deal structures, and preparing robust financial models to show after-tax outcomes, sellers can ensure they increase their after-tax return on the sale while giving buyers a compelling reason to offer competitive terms.
Gain insights into these key considerations for C corporation sellers and their management teams that can help you come to the negotiation table in a strong position.
The key to capitalizing on these benefits is advanced modeling. Evaluate different sale structures — stock versus asset — and measure the after-tax outcomes.
Boost technology and life science transaction values with tax planning
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.