| Many owners of successful businesses make mistakes that prevent them from
ever reaching their personal financial goals. We've compiled a list of the ten most
common mistakes we've seen over the last 15 years. One is shown below. MISTAKE
#2
SELLING TO A SON OR DAUGHTER
Selling to a son or
daughter is great - for the IRS:
-
The seller pays
taxes on the profits of the sale.
-
The buyers must use
after-tax dollars to make the payments, which are not tax
deductible.
-
In many cases, a
large part of the sale proceeds remain in the seller's estate
where they will eventually be taxed again.
We aren't saying that a
son or daughter shouldn't be the next owner, if they have the ability
to manage the business successfully. But there are better ways
than an outright sale to transfer the business while reaching the
personal financial goals of the current owner.
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