If you’re a business owner contemplating a sale, the timing of your move could matter more than ever. Regulatory changes in Washington are adding a fresh layer of incentive for some business owners to consider a sale.
The Changing Landscape
Many owners of privately held companies are considering selling in the next few years, and one of the strongest motivators is tax-planning.
At the heart of the shift is a package of tax legislation (often referenced under the umbrella of the “One Big Beautiful Bill”) introduced and passed into law in July, 2025. The law includes changes that could increase the attractiveness of a business sale, especially for those facing capital gains tax on deal consideration that is received once the transaction is complete.
What Specifically Is Changing?
While the details are complex and vary by situation, here are a few of the key dynamics that business-owners and advisors should keep in mind:
- For many owners, a sale triggers capital gains tax on the increase in value of the business.
- The new tax environment may allow for lower effective tax burdens on large gains — particularly if the business is set up as C corp. or qualifies for special treatment (for example, under the “qualified small business stock” rules or other carve-outs).
- The new law raises the tax-free gain cap from $10 million to $15 million for qualifying C corp. businesses that issue stock after the bill was signed into law.
- Because the legislation alters tax expectations, some owners are accelerating their exit plans rather than waiting for when they “feel ready” in the future. For more information, one of our blogs covers why business owners should plan for a business sale years in advance.
- From an M&A advisor’s perspective, the message is: corporate structure and the timing of your exit does matter, and delaying for a significant period of time may have material tax considerations.
Why This Matters for You
If you’re running a business and wondering when to sell, here are some take-aways:
- Evaluate your current ownership timeline: If you’re approaching a typical retirement exit window (say 5-10 years out), now may be the time to begin planning more concretely.
- Run the tax scenario: Estimate the tax cost (and potential savings) of selling now versus later under the new law.
- Check your business’s eligibility: Some tax benefits apply only if the business meets specific criteria (industry type, size, holding period, etc.).
- Don’t delay strategic planning: Exit readiness isn’t just about valuation. Tax positioning, transaction structure (asset vs. stock), timing, buyer universe, culture, and deal execution all matter.
- Coordinate your team: Make sure your financial advisor, tax advisor, and M&A advisors are aligned and knowledgeable about recent changes, as necessary.
- Consider state tax effects: Federal incentives are only part of the picture. State tax regimes may differ significantly.
Takeaway for Owners
Legislation doesn’t always wait for the perfect business moment; sometimes it creates windows. If you’ve been sitting in the “I’ll sell it eventually” lane, now may be the time to accelerate the conversation, both with your internal management team and your external advisors.
Final Thoughts
In the world of business exits, value isn’t just what the buyer is willing to pay, it’s what you get to keep after tax, transaction cost, and time. With the tax code always changing, the margin between “good timing” and “great timing” might be narrower than you think.
If you’d like to explore how the law could affect your exit planning or evaluate your business’s readiness for sale under this changing environment, you can reach out to Clare Advisors for an initial call.
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Disclaimer: This blog is for informational purposes only and does not constitute tax, legal, or investment advice. Always consult a qualified professional before making decisions about individual tax strategy.
Sources:
https://www.congress.gov/bill/119th-congress/house-bill/1/text