Selling real estate, a business, professional practice or other capital asset without proper advance planning can be hazardous to a seller's bottom line. Taxes, closing costs, commissions, inspections and reports, legal fees and so on all reduce net profit.
Taxes alone can easily gobble up as much as 30-50% or more of a sellers profit. Without advance planning the combined capital gains tax may be even higher than the current 20% federal capital gains tax rate, state rate and the additional 3.8% Net Investment Income Surtax brought on by the Affordable Care Act. Without a well-crafted tax strategy in place, the tax bill post-sale could amount to a significantly larger portion of a seller's profits being needlessly given up.