Question

What is the difference between an asset sale and a stock sale when selling a business?

Answer

In an asset sale, the buyer purchases the business’s assets individually, which can create different tax treatment for each asset class. In a stock sale, the buyer purchases the company’s stock, typically producing capital gains treatment for the seller. The suitable choice depends on your entity structure, tax position, and the buyer’s preferences — and the same headline price can yield different after-tax proceeds depending on the structure.

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