top of page
Search

How to Sell Your Business Without Losing Half to Taxes

  • haleyn4
  • 1 day ago
  • 3 min read
ree

Selling your business should feel like a victory lap… not a donation drive for the IRS. Yet thousands of entrepreneurs make the same painful mistake every year: they sell first and plan later. And when that happens, they watch 30–50% of their life’s work get swallowed up by taxes.

Certified Financial Fiduciary and Tax Strategist Alan Porter has seen it too many times—smart, hardworking business owners blindsided because no one warned them that the tax man plays by different rules when you sell a company. In this episode of the Strategic Wealth Strategies Podcast, Alan breaks down how to avoid that trap with simple, legal, IRS-approved strategies that protect what you’ve built.

Let’s walk through the essentials—slow, clear, and straight to the point.

Why So Many Business Owners Lose Big at Sale Time

A business sale triggers a whole pile of taxes many owners never even think about:

  • Capital gains

  • Depreciation recapture

  • State taxes

  • Net investment income tax

  • Possible Medicare surcharges

Add them up, and suddenly a million-dollar exit becomes a half-million-dollar disappointment.

And the biggest mistake?Waiting until after a buyer shows up to start planning.By then, your tax options shrink… fast.

The Most Common Tax Mistakes Business Owners Make

Alan didn’t sugar-coat it—there are three big blunders that cost entrepreneurs a fortune:

1️⃣ Not using installment sales, charitable trusts, or tax-efficient entities

These tools can dramatically reduce or defer taxes, but only if used before the sale.

2️⃣ Cashing out and dumping money into taxable accounts

Easy? Yes. Smart? Not even close.

3️⃣ Ignoring tax-advantaged vehicles like annuities or cash value life insurance

The wealthy don’t ignore these. They use them intentionally.

How Cash Value Life Insurance Becomes a Tax Shelter

Alan calls life insurance the greatest wealth-transfer tool on earth—and he means it.

Under IRS Rule 7702, properly structured policies can:

  • Grow tax-deferred

  • Provide tax-free income through withdrawals/loans

  • Avoid probate

  • Reduce estate taxes

  • Offer market protection

  • Provide long-term care benefits

  • Protect from lawsuits and liens

And perhaps most importantly…They eliminate major retirement risks: taxes, market crashes, inflation, long-term care, and bad timing in retirement withdrawals.

It’s not just a policy—it’s a financial engine.

The Power of Annuities After a Business Sale

Once you’ve sold, you need stability. You need income. You need protection.

Fixed indexed annuities can turn part of your windfall into guaranteed lifetime income. Alan explained it simply:

  • A stock portfolio might require $1M to confidently withdraw $40K a year.

  • A properly structured annuity might accomplish the same for $650K—and guarantee it for life.

Plus:

  • No market losses

  • Optional increasing income

  • Predictable contracts

  • No “hope and pray” investing

This is how the wealthy stay wealthy.

A Smart Post-Sale Blueprint

Alan laid out a straightforward plan many business owners can follow:

Step 1: Allocate part of your proceeds to a fixed indexed annuity for guaranteed income.Step 2: Use another portion to structure a cash value life insurance policy.Step 3: Move the remaining funds into trusts, charitable vehicles, or other tax-efficient tools.

The result?

  • Diversified

  • Protected

  • Tax-advantaged

  • Built for legacy

  • Safe from market chaos

Slow, steady, and smart. Exactly how wealth should be handled.

A Real Story That Changed Alan’s Mission

Alan shared a personal experience that shaped his entire career.

When his daughter-in-law passed away, her life insurance policy—and specifically the terminal illness rider—kept his disabled son from bankruptcy. That moment showed him, painfully and clearly, how powerful these tools can be when life blindsides you.

It’s why he’s dedicated himself to helping families and business owners protect what they’ve earned.

If You’re Thinking of Selling—Start Planning Now

Alan’s advice was simple:Start planning at least 12 months before you sell.The earlier you prepare, the more of your money you keep.

Your first step?

👉 Use Alan’s free Retirement Tax Calculator:www.StrategicWealthStrategies.com/RetirementTaxCalculator

Then connect with him for a no-cost consultation.

Contact Alan Porter

📞 910-551-1046📧 StrategicWealth0@gmail.com🌐 www.StrategicWealthStrategies.com

 
 
 

Comments

bottom of page