With over 1 million C corporations still active, advisors engaged in Exit Planning will inevitably encounter their owners. If the thoughts of these owners run along the same lines as owners of other types of companies, then about half of them presumably would like to exit their businesses within the next five years. However, C corporation owners face a huge problem that will likely prevent them from exiting their businesses on their terms if they choose to sell their companies to third parties. This problem is the double tax. At the very least, this problem will reduce the proceeds they can expect from a sale by 50% or more.
Double-Tax Shock
Brent James, the owner of Construction Services of Kansas (CSK), was jovial as he strode into his new advisor’s office. After...
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