Tax Increases

Jul 1, 2010 | DWHP Insights

Higher Taxes Will Reduce the After-Tax Value of Your Business

Higher tax rates will reduce the net proceeds from the future sale of your business. Some of the scheduled or proposed tax increases include:

  • An increase in the federal long-term capital gains tax rate from 15% to 20% for the top tax brackets in 2011.
  • New Medicare taxes associated with the healthcare bill would apply an additional 3.8% tax rate to realized capital gains, dividends, interest, rents and royalties effective as of 2013.
  • Many states are increasing their long-term capital gains tax rate by 1% or 2% . The illustration below assumes a current 6% state long-term capital gains tax rate.

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