Capital Gains Deferral & Sale of Business
Selling a business (or other large capital asset) is often the culmination of decades of hard work, smart decision-making, and personal sacrifice. It is also one of the most significant financial events of an owner’s life. While a successful sale can create an extraordinary opportunity, it can also trigger an enormous capital gains tax burden if not structured properly.
At Dana Whiting Law, we help business owners preserve more of what they’ve built by implementing sophisticated capital gains deferral and elimination strategies. Our firm works with entrepreneurs, founders, and closely held business owners across Arizona, California, Utah, and beyond to design custom exit plans that minimize taxes, protect legacy, and maximize long-term wealth.
If you are preparing to sell your company, now is the time to plan.
Why Capital Gains Planning Matters When Selling a Business
A business sale can generate millions — sometimes tens or hundreds of millions — in taxable capital gains. Without proactive planning, a large portion of your proceeds could be lost to federal and state taxes.
Capital gains planning cannot be done after a deal closes. To be effective, these strategies must be implemented before the sale is finalized – in some cases, up to two years in advance. The earlier you begin planning, the more options you have.
Our attorneys work alongside your CPA, financial advisor, and transaction team to ensure your sale is structured in the most tax-efficient way possible.
Tools That Can Be Used to Defer Capital Gains on the Sale of a Business
There are several advanced planning tools available to defer capital gains and create long-term tax efficiency. The right strategy depends on your goals, timeline, and overall estate and financial plan.
Charitable Remainder Unitrust (CRUT)
A Charitable Remainder Unitrust allows a business owner to contribute their ownership interest to a trust prior to sale. The trust sells the business interest, defers the capital gains, and pays income back to the seller over time. At the end of the trust term, the remaining assets pass to charity.
This strategy can provide:
- Deferral of immediate capital gains
- Lifetime income stream
- Charitable legacy
- Potential estate tax reduction
Charitable Lead Trust (CLT)
A Charitable Lead Trust works in the reverse direction of a CRUT. The trust makes payments to charity for a set term, after which the remaining assets pass to heirs—often at a significantly reduced tax cost.
This strategy is ideal for business owners who want to:
- Support charitable causes
- Transfer wealth to family in a tax-efficient manner
- Reduce estate and gift taxes
IRC §453 Installment Sale Trusts
An Installment Sale Trust under Internal Revenue Code Section 453 allows a seller to spread capital gains over time instead of recognizing them all in the year of sale.
This approach can:
- Reduce overall tax exposure
- Provide predictable long-term income
- Improve cash flow planning
- Allow for more flexible reinvestment strategies
For many owners, this can be a powerful tool for smoothing out tax liability while maintaining financial security.
Tool to Eliminate Capital Gains on the Sale of a Business
The “Uncle Murray Trust”
For certain business owners, it may be possible not just to defer capital gains — but to eliminate them entirely.
The “Uncle Murray Trust” is a highly specialized planning structure designed for owners who want to exit their business without paying capital gains tax on the sale. When properly implemented, this strategy can convert what would otherwise be taxable gains into long-term financial security, family wealth, and legacy planning. (Some tax professionals refer to this strategy as the Subscribed General Power of Appointment).
This tool is not for everyone and must be carefully structured well in advance of a sale, but when used correctly, it can be extraordinarily powerful.
Watch the Uncle Murray Trust video to learn how this strategy works and whether it may be right for you.
Experience That Makes a Difference
At Dana Whiting Law, we don’t just understand these strategies — we’ve used them at the highest level.
“One of the highlights of my career was when Trevor and I represented three of the owners of the Phoenix Suns when the Suns were purchased by current owner Matt Ishbia. Trevor and I used several of the Capital Gains deferral strategies referenced above to save millions of dollars of potential capital gains.”
— Matt Dana, Managing Partner, Dana Whiting Law
This level of planning requires deep technical knowledge, precise execution, and real-world deal experience. Our firm is trusted by high-net-worth business owners, professional athletes, private equity principals, and family enterprises to structure transactions the right way.
Start Planning Before You Sell
If you are considering selling your business in the next 6 months, 2 years, or even 5 years, now is the time to start planning. Capital gains strategies must be in place before a transaction is signed — not after.
Dana Whiting Law is an exclusive estate planning and business succession firm dedicated to protecting the wealth our clients have worked so hard to build.
Schedule a confidential consultation to explore your options and design an exit strategy that works for you, your family, and your legacy.