The planning window on a business sale closes earlier than you think

You are thinking about selling. Maybe next year, maybe the year after. Nothing is on the table, there is no buyer, and it feels far too early to be talking to your accountant about it. That is exactly the moment the useful work happens.

Deborah Daniel, CPA

12 Aug 2026 · 7 min read

A woman in a blazer sits alone at a long boardroom table with a notepad and pen.

The conversation I have most often about selling a business happens six weeks before closing. Someone rings, delighted, with a signed letter of intent and a completion date, and asks what we can do about the tax. By then the honest answer is usually not very much.

Not nothing. But a fraction of what was available eighteen months earlier, when nobody thought there was anything to discuss.

Planning does not happen at closing

The assumption is that tax planning is something you do around the transaction, the way you do the legal work and the diligence. It sits in the same mental box as the closing statement.

It does not work that way, because the moves that change the outcome are not paperwork. They are structural. They change what the business is, who owns what, and how long that has been true. You cannot do those in the six weeks before completion, and if you try, they look exactly like what they are.

Structure takes time to put in place and time to be credible

That second part is the one people miss. Most structural moves have two clocks running. The first is how long it takes to actually do the thing. The second, and the longer one, is how long the arrangement has to have existed before it is treated as real.

Entity changes have effective dates tied to filing windows. Holding periods matter for the character of gain. Ownership arrangements that were put in place the month before a sale, to move value somewhere more convenient, invite an obvious question about why they were put in place. An arrangement that has been running for years, with real economics behind it, does not invite that question at all.

The useful work happens before the letter of intent. After that, you are documenting decisions, not making them.

There is also the unglamorous half. Buyers price on what they can verify. Books that took two years to clean up produce a smoother diligence and fewer adjustments than books that were tidied in a hurry, and the difference shows up in the price rather than only in the tax.

What early versus late actually looks like

As a range, sellers who start two or three years out generally keep a noticeably larger share of proceeds than sellers who start in the final quarter. Where in that range you land depends on entity type, the mix of assets, the size of the gain relative to your other income, your state, and what you intend to do with the money afterwards.

I am not going to give you a single percentage, because anyone who does is guessing at facts they have not seen. What I will say is that the variation between an early plan and a late one is large enough to be the difference between two quite different retirements, and it is almost entirely driven by decisions made before anyone knew there was a buyer.

Rates, thresholds and the treatment of particular items change from year to year. Any figure modelled today has to be checked against the year the sale actually lands in.

What it requires from you

Clean books for several years back, not one. Buyers look further back than sellers expect, and so does anyone reviewing the return afterwards.
A settled structure, in place long enough to be unremarkable, with real economics rather than a paper arrangement.
Advisers who talk to each other. The accountant, the attorney and the wealth adviser in one conversation, early, rather than three sequential opinions that arrive too late to reconcile.
A view on what happens to the money, because the plan for the proceeds changes which structure is worth paying for.

None of this commits you to selling. That is the part owners resist, and it is the part that costs them. Doing the work does not start a clock. It only means that when the call comes, and it usually comes unannounced, you are in a position to say yes without giving away the difference.

Who this is not for

Anyone already under a signed letter of intent. If that document exists and names a price and a structure, most of the options described here have closed. There is still work worth doing, the allocation, the timing of the closing date relative to your year, the treatment of any earn-out or holdback, the plan for the proceeds. But the big structural moves are behind you, and it is more honest to say so than to sell you a project that cannot deliver.

It is also not for owners who are not actually going to sell. Some people talk about selling for a decade as a way of making a difficult year feel temporary. Structural change has costs, in fees, in administration, and sometimes in flexibility. Paying those costs for a transaction that will not happen is a bad trade, and I would rather say that early than take the engagement.

And it is not for a business that is not saleable yet. If the revenue is entirely dependent on the owner, if there is customer concentration nobody has addressed, or if the books cannot survive a week of scrutiny, the first work is operational rather than tax. Planning the tax on a sale that no buyer will complete is planning the wrong thing.

The timing, which is the whole article

Two to three years is comfortable. One year is workable and narrower. Six months is mostly allocation and timing. Six weeks is paperwork.

The uncomfortable part is that you rarely control when the window opens. Buyers appear without warning, partners change their minds, and health changes plans. The only way to have time is to have started before you needed it.

The point

This is a planning question, not a preparation question. The return simply records the deal you signed. Charter works with owners in the years before the deal exists, which is when the outcome is still being decided.

Where this goes next