Selling a Business Interest

Key Idea: Redirect tax dollars to kingdom work.

When you sell appreciated business interests, you could pay as much as 25 percent of the gain in taxes. Consider redirecting those tax dollars into kingdom work.  

When selling appreciated business interests, you generally have two options:

  1. Sell the business interests outright.
    • Pay the taxes on the gain.
  2. Gift a percentage of the business interests into charitable arrangements.
    • Pay no taxes on the gifted percentage of the business interests.
    • Receive a lifetime income on proceeds from the sale.
    • Enjoy lower income taxes now.
    • Make a wonderful gift to charity at death.

A Real Life Example

Bob and Ellen have worked hard to build up their business. They've decided to sell their interest in the business and enjoy more time with kids and grandkids.

Their situation:

  • Bob and Ellen have a total estate value of $9 million.
  • The business is valued at $4 million. Their original investment was $125,000.
  • They will pay $852,500 in taxes on the sale of their business.

Their new plan provides:

  • Lower income taxes during life.
  • 81 percent reduction in capital gains taxes.
  • A lifetime income stream.
  • Wonderful gifts to charity.
Results Lump Sum from Sale Additional Income Stream Capital Gains Taxes Paid Gifts for Charity
New Plan $2,000,000
Each year for life
(At death)
Old Plan $3,147,500 $0 $852,500 $0

Please contact us to learn more.

The information contained herein is for explanatory purposes only and is not intended to be used as tax or legal advice. The Young Life Foundation recommends that you contact a professional tax advisor who can provide you with additional information on how the use of the above techniques and ideas may apply to your personal tax situation.