Capital Gains Tax, the New Administration and You!

Sellers should be considering taking advantage of the low capital gains treatment on the sale of their company since the standard top on long-term gains rate is 15%, but it is set to rise to 20% in 2011. Then we need to consider that the Democratic administration is expected to raise the capital gains rate to 30% within the next four years. This will not only have a great impact on investors in stocks, real estate, but also businesses being sold. This is particularly important for a business owner who is contemplating an exit strategy within the next three years, weighing whether it makes more sense to grow the business and pay an extra 15% in capital gains tax down the road or sell it sooner for a little less but keeping more of the profit.

These business owners also should be aware that where will be a glut of available businesses on the market and a downward price pressure in the next few years due to the fact that there will be more sellers than buyers.

If you have been considering an exit strategy now is the time to be getting your company ready so that your are prepared when the timing is right for you.