The amount of tax you owe after selling a business will depend on the internal structure of your company and how you structure the sale. The taxes associated with selling a business can get complicated. Enlisting a qualified tax advisor or accountant can help you minimize the tax consequences of the sale.

How much you are taxed will depend on two key factors:

• The legal structure of your company
• Whether you are selling assets or stocks

Owners of sole proprietorships or partnerships sell assets. Assets can be classified in any of seven IRS classes (i.e. inventory, other tangible property, goodwill). Depending on the class, gain from property may be taxed at ordinary income rates or capital gain rates. All income from the sale of your business flows through into your personal tax return.

Owners of S corporations can choose to sell either the assets or the stock of the corporation. Stock and asset sales are taxed similarly because income from S corporations flows directly into stockholders' personal income.

Most C corporations sell stocks instead of assets. If the assets are sold, not only does the corporation have to pay tax on the sale, but the owner has to pay tax a second time on the after-tax amount removed from the corporation.