1Value

2Structure

3Fees

4Terms

5Taxes

6Result

What is your estimated enterprise value?

This is the headline price a buyer would pay for your business. If you have already run the Valuation Calculator, that number is a good starting point.

Enterprise Value

If you are not sure, run the Valuation Calculator first to get a working estimate.

What type of deal structure are you expecting?

The structure is often the largest single driver of your after-tax proceeds. If you don't know yet, choose the one most likely for your business type.

Deal structure

Stock sale You sell your shares directly. Buyer acquires the entity and assumes its liabilities. Typically results in long-term capital gains treatment for you. Most common in PE-backed deals and C-corporation sales.

Asset sale Buyer purchases specific assets, not the entity. Common for S-corps, LLCs, and partnerships. Tax treatment is mixed: goodwill is capital gains; other assets may be ordinary income. Often preferred by buyers, less so by sellers.

338(h)(10) election A hybrid: legally a stock sale, but both parties elect to treat it as an asset sale for tax purposes. Available for S-corp acquisitions. Buyer gets a stepped-up asset basis; seller typically receives a premium to offset the tax cost. Requires mutual agreement.

Transaction fees

Investment banker fee Optional

Default is 3.0% for this EV range. Fees typically range from 1.5% to 5% and are negotiable. The Lehman Formula scales the percentage down as deal size grows.

Legal + quality of earnings fees Optional

Default is $250,000. Includes sell-side legal counsel and QoE preparation. Larger deals carry proportionally higher fees.

Deal terms

Escrow or holdback Optional

Held in escrow for 12 to 24 months to cover indemnification claims. Typically 10% of EV. This is included in your net proceeds once released, but it reduces your day-one liquidity.

Earnout portion of EV Optional

Percentage of enterprise value tied to post-close performance milestones. A $15M deal with a 20% earnout means $3M is contingent.

Rollover equity Optional

Percentage you are reinvesting into the buyer's entity post-close. Reduces cash received now; creates a second bite at the apple in 3 to 7 years.

Working capital true-up Optional

Working capital delivered at closing versus the negotiated peg. Negative means you delivered less than the target; positive means more. Default is a -1.0% haircut reflecting common outcomes.

Tax situation

Federal long-term capital gains rate Optional

The top federal LTCG rate is 20% for high earners (income above $553,850 for married filing jointly in 2024). Asset sales apply LTCG to goodwill and ordinary income rates to other assets; this calculator uses LTCG rate as the blended approximation.

Apply 3.8% Net Investment Income Tax (NIIT) on top of LTCG rate

NIIT applies to investment income including capital gains from a business sale for most sellers above income thresholds. Adds 3.8 percentage points to your effective federal rate.

State of residence Optional

State rates shown are the top marginal capital gains rate. Some states tax capital gains as ordinary income; others have preferential rates or no income tax at all. Consult your tax advisor for your specific situation. Municipalities in some states (Portland, San Francisco, Detroit, others) also impose local income taxes not modeled here.

Section 1202 QSBS eligibility Optional

Qualified Small Business Stock (Section 1202) can exclude up to $15M of capital gains from federal tax if all three conditions are met. This is one of the most valuable and underutilized provisions in the tax code for business owners.

Answer three questions to see if your gain qualifies for the Section 1202 exclusion.

1. Was your business a C-corporation for the entire holding period?

2. Have you held the stock for at least 5 years?

3. Was the company's gross asset value under $50 million at the time of stock issuance?

Portion of proceeds taxed as ordinary income Optional

In asset sales, portions of the proceeds allocated to depreciation recapture (Sec 1245/1250), non-compete payments, and consulting agreements tax at ordinary income rates (up to 37%), not the preferential long-term capital gains rate. A middle-market asset sale typically has 10-25% of the transaction value in these categories; a 338(h)(10) election has less because the C-corp step-up already handles most of the recapture.

Ordinary income tax rate Optional

Top federal ordinary income rate is 37% for 2024. Your effective rate may be lower depending on total taxable income. State ordinary income rates typically match state capital gains rates.

Estimated Net Proceeds

Waterfall breakdown

Now see what you need to net for the life you want

The Wealth Gap Calculator shows you how your net proceeds stack up against the investable assets you would need to sustain your lifestyle after exit.

Open the Wealth Gap Calculator →

Estimate based on the inputs you provided. Actual net proceeds depend on final deal structure, quality-of-earnings adjustments, and negotiated tax positions. State tax rates shown are top marginal rates and may not reflect your specific situation. Section 1202 eligibility requires review of all statutory requirements. Asset sales have additional tax exposure from depreciation recapture and ordinary-income allocations, which this tool approximates via the ordinary-income portion input. Deal-specific analysis by a qualified tax advisor is required for accurate planning. This is not investment, tax, or legal advice.

Deeper reading on what moves your take-home number

Three articles and three playbooks built around the decisions that determine what you actually keep.

Article Asset sale vs stock sale The structural decision that often determines who walks away happier from the closing table. Article Section 1202 QSBS explained One of the most valuable and underused provisions in the tax code for business owners. Article Earnouts and rollover equity How deferred and contingent deal structures affect your real proceeds and risk profile. PDF The pre-sale tax playbook Six strategies that can move after-tax proceeds by 15 to 30 percent. PDF Reading the LOI: 7 traps The structural terms hidden in the standard Letter of Intent that affect your proceeds. Article The working capital peg How the working capital adjustment works and why it catches owners off guard at closing.

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