How is Goodwill Taxed When Selling a Business? Explained in Detail - Final Ascent M&A Advisors

When you’re selling a business, it’s not as easy as slapping a “For Sale” sign on the front window and waiting until someone hands over some cash. There are countless preparation steps, negotiations, information exchanges, and more that have to be considered.One of those many variables is “Goodwill”. Goodwill is a slightly complex aspect of the selling process, and it has a major impact on the long-term health of the deal.In this article, we want to cover how goodwill is taxed when selling a business. Let’s start by determining what goodwill is, how it works, and how you can use it to your advantage.What is Goodwill When Selling a Business?In the simplest terms, goodwill is a personal value you’ve gained with your customer base, suppliers, and other parts of your business model that are required for it to function. When you’ve built up quite a bit of it, you can assure your buyer that they will enjoy the benefits of your hard work in the sense that those established supply lines and cu...