Want to Sell Your Business to Beat 2022 Tax Increases? Consider Charitable ‘Bunching’

You could be facing quite a tax bill if you sell your business, especially if capital gains taxes rise. One tool to soften that blow could involve the charitable giving you regularly do anyway.

A business owner looks at inventory.
(Image credit: Getty Images)

Thousands of U.S. businesses are sold every year. But with a large increase looming in the U.S. capital gains tax, more owners who will earn more than $1 million this year – including any proceeds from a sale – are strongly considering a sale of their business before year’s end.

For many business owners, 2021 is the perfect storm. The stock market’s seemingly endless rise has helped many to double their net worth within recent years. At the same time, the impact of COVID-19 has made daily operations a never-ending grind. Finally, many are getting offers they can’t refuse. For example, I work with many doctors who receive regular inquiries to sell; one who has experienced all the items I mentioned has just decided to take an offer valued at several million dollars.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Eric A. Harbert, CPA, CFP®
Partner | Wealth Adviser, McGill Advisors, a division of Brightworth

Eric Harbert has an extensive background in tax and financial planning with over 15 years’ experience.  He is a partner and wealth adviser at McGill Advisors, a division of Brightworth, focusing on managing wealth for business owners.  Eric has a master’s degree in accounting from UNC Charlotte and holds certifications as a Certified Public Accountant and CERTIFIED FINANCIAL PLANNER™.