Business Owners calculator
Asset Sale vs. Stock Sale Calculator
How might an asset sale and a stock sale change what the owner keeps?
What this tool helps you answer
How might an asset sale and a stock sale change what the owner keeps?
A buyer can offer the same headline price through an asset purchase or stock purchase and leave the seller with very different cash. This calculator separates owner stock basis, company asset basis, ordinary-income gain, capital gain, sale costs, debt, and a possible C-corporation second tax layer so the structure is discussed before terms become binding.
Transparent method
How the estimate works
See how the estimate is calculated
For the stock case, subtract sale costs and owner stock basis from price, apply the entered owner gain rates, and subtract debt and tax from closing cash.
For a pass-through asset case, measure gain above company asset basis and divide it between entered ordinary-income gain and remaining long-term gain.
For a C-corporation asset case, apply the entered company tax rate, calculate cash distributed after company tax and debt, and estimate shareholder tax above stock basis.
What to check before acting on the result
How to read it
- Compare cash to the seller rather than comparing tax rates alone.
- Ask for the proposed price allocation before signing a letter of intent.
- Run the entity type, state, recapture, debt, and stock-basis facts through the CPA and transaction attorney.
Not included
- A negotiated purchase-price allocation or completed Form 8594
- Earnouts, installment sales, rollover equity, working capital, escrow, or indemnities
- Every depreciation-recapture, inventory, goodwill, real-estate, or state sourcing rule
- Buyer benefits, legal liability transfer, purchase agreement terms, or a valuation
Common questions
Frequently asked questions
Why may sellers prefer a stock sale?
A stock sale may produce more long-term capital gain and avoid entity-level asset tax, but liability, buyer basis, contract transfer, and market leverage also matter.
Why may buyers prefer an asset sale?
A buyer may choose assets and receive new tax basis for future deductions while avoiding unwanted liabilities, subject to the agreement and tax rules.
What is Form 8594?
Buyer and seller generally use Form 8594 to report the agreed allocation among asset classes in an applicable asset acquisition.
Why is a C-corporation asset sale different?
Gain may be taxed at the corporation and remaining cash may be taxed again when distributed or liquidated to shareholders.
Sources
Rules and references behind this calculator
Want the fine print? See sources, methods, and limits.