columbia business owners
The decisions that arrive with the sale
In the years around selling your business, several consequential financial decisions land at the same time, and the order you make them in matters.
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deal structure
How the proceeds arrive is itself a decision
An asset sale and a stock sale are taxed differently. A lump sum, an installment note, and an earnout arrive on different schedules, with different risk and different tax timing. Before you plan around a number, you need to know what form that number takes, when it actually shows up, and what each structure commits you to.
federal taxes
One closing, several tax treatments
Sale proceeds are rarely one kind of income. The purchase price allocation can split your payout among long-term capital gain, ordinary income, and depreciation recapture, and a consulting agreement or non-compete adds more ordinary income on top. The year you close is often the highest-income year of your life, which makes everything else you do in that calendar year a tax decision too.
health coverage
Coverage usually ends at closing
Many owners carry their health insurance through the company they are selling. After the sale, you need a bridge to Medicare at 65: COBRA where it applies, the marketplace, or a spouse's plan. Income from the sale matters twice here. It can change what you pay for marketplace coverage now, and it becomes part of the income record Medicare uses to set your premiums later.
south carolina taxes
South Carolina treats the gain differently
South Carolina allows a deduction on net long-term capital gains, so the portion of your sale that qualifies as capital gain is treated differently by the state than the portion taxed as ordinary income. The purchase price allocation you negotiate changes your state bill, not just your federal one, and the state's retirement income provisions shape the years that follow.
the sequence problem
Every decision changes the others
None of the four above is a standalone choice. Each one changes the inputs to the rest:
The deal structure decides which tax treatment each dollar receives.
The purchase price allocation changes your South Carolina deduction.
Income in the closing year changes what you pay for health coverage.
Installment timing changes the income record Medicare prices from later.
There is no universal right answer. There is a right order for your situation, and the time to find it is before you sign.
in their words
From people who work with Brad
I was very uninformed when I started my 401k journey late in life. Brad has been a treasure trove of advice and wisdom in what to do to try to get on track for retirement. I appreciate his quick response to texts and phone calls and the way that he treats me like a friend, and not just a client. I highly recommend Dyadic Financial, because of the owner, Brad Blackburn.
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Just wanted to take time to thank Brad for always taking care of my investments. Seven years ago, after my husband passed away, I was totally confused about any of our investments. I was advised from my estate planner to interview three financial advisors, so I did, and I have never regretted my decision. He is very trustworthy, always very prompt when I need anything in answering my calls. I would highly recommend him with any investments.
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Brad Blackburn came highly recommended to me after my husband's unexpected passing. Brad has been my financial advisor for over 5 years and I am confident my accounts are in good hands. Brad shows concern and is very personable. He doesn't miss an occasion to send a card. I would highly recommend him to anyone looking for an honest and capable financial manager.
This statement is a testimonial by a client of the financial professional as of 05/13/2024. The client has not been paid or received any other compensation for making these statements. As a result, the client does not receive any material incentives or benefits for providing the testimonial.
Have known Brad Blackburn for some time now. He is always quick to help you understand and walk you through investments, and I believe he has your best interest at heart. Thanks Brad.
This statement is a testimonial by a client of the financial professional as of 11/13/2023. The client has not been paid or received any other compensation for making these statements. As a result, the client does not receive any material incentives or benefits for providing the testimonial.
the next step
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