 | Fearing a Tax Hike Owners are Motivated to Sell |
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A looming increase of nearly 60% in the capital-gains tax rate next year is fueling sales of some privately-held businesses. Many business owners—mostly founders who could gain a lot from a sale—are looking to close deals before next year, when the maximum tax on investment income is scheduled to rise from 15% currently to at least 23.8% on most capital gains, at least for higher-income households. Many sellers intend to convert their equity into retirement funds or just start anew. "There's a kind of a panic on to get things done," said Beatrice Mitchell, co-founder of Sperry, Mitchell & Co. Inc., a New York investment bank that is advising entrepreneurs looking to sell their companies. To be sure, the weak economy has been difficult for many small-business owners across the board. The median selling price for U.S. small businesses in the quarter ended Sept. 30 was $174,000 down 8.2% from four years earlier, according to BizBuySell.com, an online small-business marketplace. The firm's findings are based on sales, reported voluntarily by business brokers and mostly of less than $1 million, in 70 major markets. SOURCE:WSJ.com http://online.wsj.com/article/SB10001424052970204789304578088931525397120.html |
