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Your business is your baby.  You’ve sacrificed for years, nurtured, endured sleepless nights and now it’s time to sell your business.  This means income…and income means…well, taxes.   

The tax side of selling a business has many moving parts, and if you get nothing from this article…remember this!  ALWAYS consult a tax or financial advisor.   

Here are four tax-related issues to keep in mind… 

  1. Are sales proceeds taxes as ordinary income or capital gains? 
  2. Is the sale assets or stock? 
  3. All cash deal or payment installments? 
  4. Can sale be treated as tax-free merger? 

 Remember these issues are relevant for federal income taxes…different states have different rules and may collect more or less taxes than the IRS on the same deal. 

How Are Business Sales Taxed? 

The IRS, with few exceptions, treat the business as individual assets, not one big sale.   

Those assets will be put into two buckets 

  1. Long-term capital gains (real or depreciable property) 
  2. Short-term capital gains at ordinary income rates (A/R and inventory) 


Pro Tip #1:  Plan +2 years ahead of selling your business to reduce ordinary income tax 

If you sell an asset that you’ve held for more than 12 months, the proceeds will be treated as long-term capital gains. The maximum tax rate for most taxpayers is 15%, with the maximum rate at 20%. Proceeds treated as ordinary income are taxed at the taxpayer’s individual rate. Currently the top individual federal income tax rate is 37% more than twice as high as the long-term capital gains tax rate. 

Asset Allocation 

Obviously, sellers will want most of their assets treated as long term capital gains.  However, most times, during negotiations, the buyer may want a different allocation, that in turn, can reduce the new owner’s tax bill.   

Pro Tip #2: Negotiate on sales price, to receive a more favorable asset allocation  

It’s a potential conflict, as the buyer often wants as much of the price as possible allocated to costs that can be deducted or assets that depreciate. 

For instance, the IRS says that selling inventory produces ordinary income.  But selling capital assets held for more than a year creates a long-term capital gain. 

Deal Structure 

In addition to asset allocation, the deal’s structure can affect the tax bill. If the seller agrees to take the price in installments, for instance, they can defer paying taxes until the payments are received. 

Pro Tip #3: Buyer competent?  Doing your due diligence can spread out your tax bill 

Buyers may end up paying more when they don’t have to pay everything upfront. And the seller may also be able to charge interest, in addition to saving on taxes.  Installment sales do add more risk, though, because the new owner must run the business well enough to produce profits to make payments. 

Corporate Stock Sales 

Sales of sole proprietorships, partnerships, and LLC’s are commonly treated as sales of separate assets.  However, when a corporation is sold the deal can be presented as a stock sale rather than a sale of assets.  This is important because if the corporation sells its assets, sale proceeds will be taxed twice. 

  1.  When the corporation pays taxes and… 
  2. Again, when its shareholders file individual returns 

In contrast, a stock sale gets taxed once, saving on taxes for the seller. 

Tax-Free Corporate Mergers 

If one corporation is buying another corporation, the deal can be done by exchanging strictly stock. Under the right circumstances, this can mean no taxes at all, as long as no cash is involved. 

The Bottom Line 

No matter the size of your business, consult a financial and tax advisor as taxes can eat into the cash you were hoping to get out of your business.  All this is governed by a complex set of IRS rules, which may not always be straight-forward.    



As major investment firms promote their virtuous investments that maximize societal value, while seemingly scrapping their goal of maximizing shareholder value…one must ask:  Is woke capital truly committed and capable of delivering on its heroic quest, or is it simply pandering to social progressivism for profits and PR? 


We live in a day where the undercurrent of mistrust towards institutions is at an all-time high.  Whether it is Wall Street, the Government, or Hollywood…everyone has an agenda, and pointing fingers seem to be the solution for a problem as vague as the umbrella of solutions offered.  Elevated as the root cause that threatens all of humanity’s prosperity…man created climate change…and the fuel propelling us off this cliff of human apocalypse…fossil fuels?!? 


Poverty & Human Development 

It is hard to argue, since the dawn of humanity, that no other energy source has plucked humanity from abject poverty to the precipice of human flourishing, development, and into enlightenment as fossils fuels have.  It has afforded our society the luxury to focus on values that are non-survival related and have enabled more progressive focus on values of equality, social justice, and environmental stewardship.  But tell that to almost half of the world that lacks such luxuries and would kill to enjoy a fraction of America’s energy abundance, and the 1st world values that come with them.   

Countries like Indonesia are moving away from clean energy projects. Credit: Getty Images


Rising energy consumption is tightly correlated with rising income and living standards, historically lifting humanity into the modern world.  Access to cheaper forms of energy is the necessary steppingstone for proper human development, and not a process that should be skipped with more modern expensive options.  


Humanity has flourished over the past two centuries with the average life expectancy increasing from 30 to 70 years, due to the use of machines (technology) coupled with the harnessing of energy (mainly fossil fuels) with these technologies.  But linking historical human development with environmental risk requires a more targeted approach.  Humans suffer from far more immediate local environmental risks, such as indoor air pollution, water pollution and water-borne illnesses, and malnourishment than more long term global environmental risks, such as climate change, ozone depletion, and ocean acidification. 


Over the decades, investment into business, specifically energy and energy technologies, has been a worthy, sustainable, and profitable endeavor whose local impacts can be certainly verified.  In particular, the vision, commitment, innovation, and sacrifice of the fossil fuel industry and the millions of talented employees, has been the irreplaceable and beneficial engine of progress for America.  Doing far more good than harm.  Thus, it is unjust to poorly treat and vilify an industry of people that do not deserve such ire.  Just imagine where the world would be without fossil fuels! 

Two possible agendas can explain¬†this¬†demonization and¬†woke¬†capital¬†mindset.¬†¬† First,¬†to deflect the¬†public‚Äôs¬†perception¬†of Wall Street¬†greed¬†(power and control)¬†and¬†poor¬†performance,¬†it is¬†much easier to¬†use¬†a¬†popular¬†cover¬†narrative¬†(climate change)¬†and¬†perpetrator¬†(fossil fuels)¬†than to¬†accept responsibility.¬†¬†And why not,¬†when doing¬†so¬†additionally¬†elevates¬†your status and¬†virtuousness.¬† Second,¬†distracting¬†an investor¬†from¬†reality¬†is profitable‚Ķand¬†words¬†like¬†‚Äúsustainability‚ÄĚ and ‚ÄúESG‚Ä̬†and¬†phrases¬†like ‚Äúsaving the planet‚Ä̬†are powerful¬†images¬†and¬†again‚Ķprofitable.¬†


Economy & Investment 

Recently the behemoth investment firm, BlackRock, which manages $7 trillion in assets,¬†committed to a multitude of ESG initiatives including substantially increasing its so-called ESG funds, pushing clients to adhere to the UN‚Äôs Sustainable Development Goals, and aligning itself with ‚ÄúClimate Action 100+‚ÄĚ aimed¬†at¬†improving business strategy with the goals of the Paris Agreement. ESG investing¬†today is estimated at over $20 trillion in AUM or¬†¬ľ¬†of all professionally managed assets globally.¬†¬†¬†


If¬†BlackRock and its sustainability-allies are true¬†virtuous¬†climate¬†believers,¬†why then has it been expanding its¬†firms‚Äô¬†holdings in serial polluting¬†Chinese investments?¬†¬†As a result,¬†millions of untold¬†investors, through¬†asset managers and their ESG vehicles¬†are¬†helping fund¬†and strengthen the Chinese Communist Party (CCP), and their¬†atrocious record of human rights violations and increasing¬†polluting policies.¬†¬†Shifting¬†this ‚Äúnew standard for investing‚Ä̬†reeks¬†of¬†hypocrisy,¬†misleading¬†shareholder¬†stewardship,¬†and¬†disingenuous profiteering.¬†


Trends show energy consumption will continue to rise globally in the 21st century.  Modern economies are becoming less materially intensive and more service and knowledge focused, while economy growth rates exceed slower environmental impact rates.  In part, fueled by the cyclical effect of affordable fuels and technologies that enable reducing environmental impact in the first place.  This decoupling effect of human development from the environmental impacts is predicated on more efficient human activity driven by energy, technology, and demographic trends, like urbanization of the planet…not unproven investment theory based on poor scientific, economic, and societal history. 


How can the woke sophisticates in the financial services world and beyond who knowingly underwrite China, and other implied nefarious companies, claim to be genuine progressive ESG loyalists, let alone proponents of justice of any kind? 


Energy & Natural resources 

The history of harnessing energy through technologies is an intertwined dance between the patient process of human activity, fueled by economic investment, but relative to the increasing ability to use natural resources more efficiently.  Americans should know this better than anyone.  The history of harnessing natural resources in this way has afforded America these current modern energy opportunities.  Again, one cannot simply skip steps on its way to maximizing human activity.  Diversifying investment products should favor those with the most eco/cost efficient solutions, relative to the specific stage in that localized process.  Understanding that applying a general global policy to local ecosystems, does not protect the very natural resources they aim to address.  Ordering targeted solutions for energy sources should favor the benefits to human development first, then focus on efficiency of those waste streams and use of natural resources. 


But to suggest that the idea of sustainability investments is the only conceivable path forward, is to infer that historical ones were not.  Not true.  Moreover, little evidence exists that human population and economic expansion will outpace the capacity to grow food or procure critical material resources in the foreseeable future.  And ironically, all modern so called renewable energy is truly neither renewable nor sustainable.  All require exploiting natural resources and underlying technologies.   


This sleight of hand woke capital is trying to pull off is fundamentally nothing more than an attempt to profit and take control of an energy transition.  But victoriously parading around their own virtue and value is good marketing…even though it may be hard to swallow.  Modern so-called sustainable options are simply not affordable…yet…nor remotely as efficient and helpful as advertised.   



For this purpose, let us not pretend that demonizing an undeserved industry, while wrapping itself in the virtuous robe of climate change, is in of itself noble or accomplishes something that it has not done in the first place.  In the last few decades, humanity has seen exponential progress towards once unfathomable human development.  As a proponent of the oil and gas industry, supporting a diversified, efficient, and agnostic energy policy is the most complete historical and economic investment strategy.  Insofar as it uses natural resources efficiently, reduces poverty and increases modern living standards, and progressively balances capital/energy/labor economically, the virtue of investment and economic stewardship should be judged on what it has done and what it continues to do.  Throwing the baby out with the bath water solely on the perceived merits of perception or progressivism is neither responsible nor woke.  Efficient reduction of monetary and environmental waste has and will continue to propel humanity towards the summit of prosperity.  Only then can the luxury of progressive societal values truly permeate humanity as a whole and transform our planet, our ability to steward, and ourselves.  



Every day, as an organization, we speak with individuals about the building and preservation of capital.  But along this journey with investors, invariably a few intangible factors always seem to influence an investors decision-making mindset…even more so than the numbers or return profile. Their HEALTH! 

‚ÄúWhen health is absent‚Ķwealth becomes useless.‚ÄĚ ‚ÄďHerophilus¬†

The Deep link between health and wealth is clear and few things destroy wealth, or impact the upward mobility of wealth, like poor health.  However, most folks think of health in the context of the body only.  The basics for a healthier body is a trillion dollar industry including, the right foods, diets, supplements, limiting sugar, exercising regularly, not smoking or taking illegal drugs, limiting alcohol consumption, stress reduction, and getting plenty of sleep. 

However, focus on distilling the human experience down to only the physical outermost man, dilutes the mind/soul and spiritual health of an individual.  All three ingredients act like a threelegged stool supporting one another towards total health.  If one is weak, the stability of overall health will be impacted, or may not function at all. 

The connection between health and wealth should be deeply understood by everyone, and it is therefore important to create and roll out strategies to manage both for truly life-enhancing benefits and opportunities. 

But why is this such a challenge?  And where does it typically go wrong? 




Health:¬†‚ÄúA persons¬†mental or physical state of being free from illness or injury‚Ä̬†

Wealth:¬†‚ÄúWhat is left over in abundance that has and stores value‚Ä̬†

Does more monetary wealth mean an abundance of health?   

The Body 

According to the studies from Universities and CDC…income is directly linked to physical health outcomes (figure 1).

Figure 1¬†‚ÄstCDC, Self-reported poor¬†health by income, 2011

This would make sense on its face, as wealthy individuals have more access to healthier food, housing, transportation, school systems, investment opportunities, and medical resources.   

 However, what about investors who have currently built their wealth…those who have spent their life making wise financial decisions or sacrificing for their business?  Many times, this cost of abundance has come at the cost of physical health.  Americans spend more than $3.5 trillion annually on health-related expenses. There are very few destroyers of wealth quite like poor physical health. Per the HHS, more than 80% of adults do not meet the guidelines for both aerobic and muscle-strengthening activities. Recent reports project that by 2030, half of all adults (115 million adults) in the United States will be obese.  But the state of physical health is not as simple as just taking care of the body.   

The Mind/Soul 

The link between the body and the outer man’s mind/soul is like determining which came first…the chicken or the egg.  Either way they are both dependent on each other for an abundance of health.  The soul encompasses one’s identity, personality, character, emotions, intellect, will, and conscience.  But outside of external forces, nothing has quite the power over the body, as the mind does.  The mind is the computer of the body, which performs over ten quadrillion (10,000,000,000,000,000) operations per second!  But one in five Americans has a mental health disorder. Whether diagnosed or undiagnosed, an estimated 43.8 million Americans experience a serious mental illness such as depression.  Americans Spend Over $200 Billion annually treating mental health conditions between prescription medication, therapy sessions, and hospital visits. 

The 4 brain chemicals 

  • Endorphin ‚ÄĒ the pain-masking chemical¬†
  • Dopamine ‚ÄĒ the goal-achieving chemical¬†
  • Serotonin ‚ÄĒ the leadership chemical¬†
  • Oxytocin ‚ÄĒ the chemical of love/connection¬†

The mind controls¬†the body¬†with¬†power chemicals that¬†can¬†aid¬†in overall health.¬† However,¬†an overabundance of¬†survival chemicals like¬†cortisol,¬†adrenaline, and¬†norepinephrine¬†can lead to long term mental and physical¬†health complications.¬†¬†People with less income¬†are four times more likely to report¬†being nervous and five times more likely to report sadness ‚Äúall or most of the time‚ÄĚ (figure 2).¬†

Figure 2 ‚Äď CDC,¬†Feelings¬†by income, 2011¬†

The Spirit 

The whole person¬†is made of the tangible outer man, but also embodies the inner man.¬† Ones spirit is defined¬†as ‚Äúthe spiritual or immaterial essence of a person, embodied.‚Ä̬†¬†A¬†person‚Äôs¬†spirit, or inner man,¬†is where discernment,¬†wisdom, peace, revelation, and communication¬†with God¬†take place.¬†¬†A survey¬†recently¬†showed¬†9 out of 10 people believe in something higher than themselves, transcendent, and external.¬† This deep sense of¬†worth,¬†purpose,¬†and meaning¬†has¬†extremely powerful health benefits.¬†¬†Spiritual wealth and abundance¬†are¬†not¬†found¬†in the¬†tangible things, but¬†perceived¬†in¬†the¬†innermost¬†intangible parts that¬†transcend¬†the¬†physical¬†man.¬†¬†¬†

‚ÄúThe mind governed by the spirit is life and peace.‚Ä̬†‚ÄďRomans 8:6¬†

This innermost purpose and passion influence the mind/soul, change life decisions and paths, and can sometimes be considered as irrational or based on faith or things that are unseen.   

“The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well.” ‚ÄĒRalph Waldo Emerson¬†

However few people, 9 minutes on average, spend time connecting spiritually whether through prayer, meditation, reading, or nature.   

The Wealth Link 

Wealth is found in both monetary and non-monetary things.  Having an abundance of money, however, is useless unless built upon an abundance of healthy body, mind, and spirit.  While wealthier folks do experience better health outcomes because of their wealth, poor health can not only destroy current wealth but affect the occurrence of wealth to begin with.   

Mental pain, physical pain, fear, and worry are difficult conditions and mindsets that we see all the time…and they unfortunately impact the decisionmaking of many investors.  While the basics for creating a healthier lifestyle are widely accepted and known to many people…they still do not implement them!  The steps for devising, implementing, and managing financial planning strategies are, arguably, not quite as simple due to the personal mindsets and circumstances of each individual.  In all cases, having advisors, trainers, spiritual leaders, or friends that can speak into or implement your path to health and wealth…is the key to unlocking these challenges…and the life-changing benefits and opportunities that they may afford.