What to do two years before you sell your practice or company

Selling a healthcare practice or privately held company is often the largest single financial event of a business owner’s career. Yet many owners only begin tax planning when a letter of intent is already on the table.

To qualify for the Lifetime Capital Gains Exemption (LCGE) on Qualified Small Business Corporation (QSBC) shares, your corporation must meet strict asset-use tests both at the time of sale and throughout the 24 months leading up to the transaction.

Starting two years ahead gives you time to purify excess passive assets, consider a family trust or reorganization with your accountant and tax lawyer, and structure the transition around your retirement income plan.