Calculator Disclaimer

What the calculator is

The exit tax calculator on this website is an educational estimation tool designed to help business owners develop a rough sense of the potential tax exposure associated with a business sale. It is intended to illustrate how different variables — deal structure, state of residence, use of tax strategies — can affect an estimated tax outcome.

The calculator is not a tax return, tax projection, financial forecast, or professional tax advice. It does not account for your specific facts and circumstances and should not be relied upon as the basis for any financial or tax decision.

Assumptions used

The calculator applies simplified, fixed assumptions. Actual tax rates and rules may differ materially. Key assumptions include:

• Federal long-term capital gains rate: 20% — the top federal rate for long-term capital gains is applied uniformly. Taxpayers in lower brackets may face lower rates (0% or 15%).
• Net Investment Income Tax (NIIT): 3.8% — applied to capital gain income above certain thresholds. Whether NIIT applies depends on your modified adjusted gross income and filing status; the calculator applies it without income-based phase-in.
• Top ordinary income rate: 37% — applied to any portion of sale proceeds characterized as ordinary income (e.g., depreciation recapture, asset sale ordinary income components). Actual rates depend on total taxable income.
• California — mental health surtax excluded — California imposes a 1% mental health services surtax on taxable income above $1 million. This surtax is notincluded in the calculator’s California estimates.
• QSBS — simplified $10M cap— Qualified Small Business Stock (QSBS) exclusions are estimated using a simplified $10 million gain exclusion cap. Actual QSBS eligibility is complex and depends on the issuing corporation’s status, holding period, original issuance, and other conditions not captured by the calculator.
• Installment sale deferral not modeled — spreading gain recognition over multiple tax years through an installment sale is not reflected in calculator outputs.
• Alternative Minimum Tax (AMT) not modeled — the calculator does not account for AMT, which may apply to certain transactions involving incentive stock options, QSBS exclusions, or other preference items.
• Phase-outs, deductions, and credits not modeled — itemized deductions, above-the-line deductions, income-based phase-outs, and tax credits that could reduce your actual liability are not incorporated.
• “Other state” uses 5% — for states not listed individually, the calculator applies a blended estimate of 5% as a rough approximation of a typical state capital gains rate. Actual state rates vary significantly.

Results are not projections or forecasts

Calculator outputs are hypothetical illustrations based on the assumptions described above. They are not projections, forecasts, or predictions of actual tax liability. Actual results will differ — sometimes significantly — based on your specific facts, applicable law at the time of sale, deal structure, and the involvement of qualified tax and legal counsel.

No output from this calculator should be interpreted as a guarantee, estimate, or representation of the tax consequences of any actual or planned transaction.

Not a substitute for professional advice

This calculator is not tax advice, not legal advice, and not investment advice. Using this tool does not create a client relationship with Matt Reese, CPA, Measured Risk Portfolios, or any affiliated person. No fiduciary duty is created by use of this calculator.

The complexity of business exit taxation — including entity type, deal structure, state apportionment, timing elections, and integration with estate and investment planning — requires review by a qualified CPA and, where applicable, a registered investment adviser. Do not make tax, financial, or legal decisions based on calculator outputs alone.

Entity disclosure

Tax and accounting services are provided through Matt Reese, CPA. Investment advisory services are provided through Measured Risk Portfolios, a registered investment adviser. Matt Reese, CPA and Measured Risk Portfolios are separate entities. Clients are not required to engage both.