--- title: What to Do Before Selling a Business or Real Estate to Reduce Capital Gains description: Learn key tax strategies to reduce capital gains before selling your business and protect more of your wealth. image: https://blog.hwtaxstrategies.com/hubfs/What%20to%20Do%20Before%20Selling%20a%20Business%20to%20Reduce%20Capital%20Gains.jpg --- [Skip to main content](https://blog.hwtaxstrategies.com/insights/before-selling-business-reduce-capital-gains-taxes#maincontent) [Login](https://login.orionadvisor.com/login.html?g=6ad25fdc-1d37-4c1d-80b1-f64d1cd5c2e5&e=2&i=1899) [Secure Documents](https://www.encyro.com/hwtaxstrategies) [![HW Tax Strategies](https://blog.hwtaxstrategies.com/hs-fs/hubfs/Branding/Logos/Tax%20Strat%20logo%20-02.png?width=307&height=93&name=Tax%20Strat%20logo%20-02.png) ![Tax Strat logo -06](https://blog.hwtaxstrategies.com/hs-fs/hubfs/Branding/Logos/Tax%20Strat%20logo%20-06.png?width=8536&height=2592&name=Tax%20Strat%20logo%20-06.png)](https://hwtaxstrategies.com) [Home](https://hwtaxstrategies.com/) [About](https://hwtaxstrategies.com/about) [Strategy](https://hwtaxstrategies.com/strategy) [Services](https://hwtaxstrategies.com/services) [Resources](https://blog.hwtaxstrategies.com/insights) - [Blog](https://blog.hwtaxstrategies.com/insights) - [FAQ](https://hwtaxstrategies.com/faq) [Contact Us](https://hwtaxstrategies.com/contact-us) Search for topics or resources Enter your search below and hit enter or click the search icon. 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Search for topics or resources Close Search [Home](https://hwtaxstrategies.com/) [About](https://hwtaxstrategies.com/about) [Strategy](https://hwtaxstrategies.com/strategy) [Services](https://hwtaxstrategies.com/services) [Resources](https://blog.hwtaxstrategies.com/insights) Resources [Resources](https://blog.hwtaxstrategies.com/insights) [FAQ](https://hwtaxstrategies.com/faq) [Blog](https://blog.hwtaxstrategies.com/insights) [Contact Us](https://hwtaxstrategies.com/contact-us) [Login](https://login.orionadvisor.com/login.html?g=6ad25fdc-1d37-4c1d-80b1-f64d1cd5c2e5&e=2&i=1899) [Secure Documents](https://www.encyro.com/hwtaxstrategies) [«  View All Posts](https://blog.hwtaxstrategies.com/insights) # What to Do Before Selling a Business or Real Estate to Reduce Capital Gains 2 min read By [Dan Blair](https://blog.hwtaxstrategies.com/insights/author/dan-blair) ![A man reducing his capital gains tax with HW Tax Strategies](https://blog.hwtaxstrategies.com/hs-fs/hubfs/What%20to%20Do%20Before%20Selling%20a%20Business%20to%20Reduce%20Capital%20Gains.jpg?width=2250&height=1500&name=What%20to%20Do%20Before%20Selling%20a%20Business%20to%20Reduce%20Capital%20Gains.jpg) - Start tax planning as early as possible — even weeks before closing can make a meaningful difference for certain structures. - Waiting until a deal is substantially negotiated can trigger the IRS assignment-of-income doctrine, eliminating key wealth-preservation options. - Pre-sale trust structuring, investment-based deferrals, and installment structures are primary ways to keep more of your equity. To reduce capital gains taxes on the sale of a business or real estate, the most powerful planning happens before the deal closes. For high-net-worth entrepreneurs and investors, a significant liquidity event often represents a lifetime of effort, and without proactive planning, taxes can consume a substantial portion of the proceeds. The earlier we are involved, the more options you have. Even after a sale closes, there is often more that can be done, but the strongest tools require action while the transaction is still in motion. ## **What Happens If You Wait Too Long?** Once a deal is substantially negotiated, the IRS frequently applies the assignment-of-income doctrine, which can nullify late-stage planning designed to reduce your tax liability. The most effective strategies depend on being in place before that point. Acting early is what keeps the full range of options open and prevents you from leaving significant money on the table. ## **Key Strategies to Mitigate Capital Gains on a Business Sale** While the tax code is complex, several strategies provide substantial relief for business owners preparing for an exit. We build tailored frameworks using the following methods. ### **Pre-Sale Trust Structuring** Certain trust structures, established before a deal is finalized, can take ownership of the asset through a structured sale that spreads or defers the resulting gain rather than recognizing it all at once. Implementing these structures early, with proper legal coordination, is what makes them both compliant and effective. ### **Investment-Based Offsets and Deferrals** Real investments with genuine economic substance — including oil and gas, non-cash charitable structures, and Qualified Opportunity Zones — can offset or defer significant tax in the same year as your sale. The right vehicle depends on your income profile, timeline, and goals. ### **Installment Structures** Receiving proceeds over time rather than in a single lump sum can defer gain recognition into future tax years, reshaping both the timing and the income profile of your exit. ## **Key Strategies for Real Estate Sellers**  Real estate exits carry the added complexity of depreciation recapture, taxed at a higher rate than long-term capital gains. ### **1031 Exchanges and Their Alternatives** A 1031 exchange defers capital gains when the goal is to stay invested in real estate, and we use them when they fit. We also bring alternatives to the table, because many investors at a liquidity event do not want to be trapped in another property. ### **Charitable and Deferral Structures** Trust structures, charitable vehicles, and Qualified Opportunity Zones all apply to real estate sellers, giving investors a meaningful range of options beyond a straight sale. ## **Protect Your Exit with HW Tax Strategies** Your exit should reward your lifetime of hard work, not create an unnecessary tax burden. We are ready to review your expected sale timeline and identify tax mitigation opportunities before your transaction is finalized. Contact HW Tax Strategies to begin your pre-sale planning.   [Dan Blair](https://blog.hwtaxstrategies.com/insights/author/dan-blair) Daniel Blair is the Founder, CEO, and CCO of Horizon Wealth and HW Tax Strategies. With a deep commitment to helping affluent individuals, business owners, and entrepreneurs preserve and grow their wealth, Dan leads his firms with a focus on engineering smart solutions to complex tax challenges. His approach centers on mitigating and deferring taxes through innovative strategies tailored to each client’s unique financial landscape. Guided by a strong faith in God, Dan believes we are all called to be good stewards of the resources entrusted to us. This belief inspires a mission-driven approach to financial planning and tax strategy. His passion lies in empowering clients to maintain and expand their wealth through thoughtful, strategic tax solutions. Topics: [Tax Strategy](https://blog.hwtaxstrategies.com/insights/topic/tax-strategy) Don't forget to share this post: ## Related Articles ### [![](https://blog.hwtaxstrategies.com/hs-fs/hubfs/AdobeStock_1461240886.jpeg?width=7008&height=4672&name=AdobeStock_1461240886.jpeg) Long-Short Investment Strategy: A Market-Based Tax Mitigation Solution to Offset Capital Gains October , 2025|2 min read](https://blog.hwtaxstrategies.com/insights/long-short-investment-strategy-a-market-based-tax-mitigation-solution-to-offset-capital-gains) ### [![](https://blog.hwtaxstrategies.com/hs-fs/hubfs/AdobeStock_1428210192.jpeg?width=7796&height=4381&name=AdobeStock_1428210192.jpeg) 12 Tax Strategies to Reduce Your Capital Gains Tax Burden July , 2025|2 min read](https://blog.hwtaxstrategies.com/insights/tax-strategies-to-reduce-capital-gains) ### [![](https://blog.hwtaxstrategies.com/hs-fs/hubfs/AdobeStock_1327773842.jpeg?width=5888&height=3328&name=AdobeStock_1327773842.jpeg) How Direct Indexing Helps Offset Capital Gains Taxes June , 2025|2 min read](https://blog.hwtaxstrategies.com/insights/direct-indexing-capital-gains) Location 650 South Cherry St. Suite 825 Denver, CO 80246 Phone: [(303) 777-7124](tel:+13037777124) Quick Links - [About](https://hwtaxstrategies.com/about) - [Strategy](https://hwtaxstrategies.com/strategy) - [Services](https://hwtaxstrategies.com/services) - [Resources](https://blog.hwtaxstrategies.com/insights) - [Contact Us](https://hwtaxstrategies.com/contact-us) - [Form CRS](https://blog.hwtaxstrategies.com/hubfs/EBook/Horizon%20Wealth%20Form%20CRS%20Sept%202025.pdf) - [Terms & Privacy Policy](https://hwtaxstrategies.com/terms-and-privacy-policy) Connect With Us - [Facebook](https://www.facebook.com/people/Horizon-Wealth/61561017926430/) - [Linkedin](https://www.linkedin.com/company/hwtaxstrategies/) - [Youtube](https://www.youtube.com/@HWTaxStrategies) © 2026 HW Tax Strategies All Rights Reserved. © 2026 HW Tax Strategies. All Rights Reserved. Important Disclosures Investment advisory services are offered through Horizon Wealth, a Registered Investment Adviser. Registration does not imply a certain level of skill or training. Information provided by HW Tax Strategies, including through this website and associated links, is for informational and educational purposes only and should not be construed as an offer or solicitation to purchase or sell any security or as personalized investment, legal, accounting, or tax advice. Investment, financial planning, and tax strategies may not be appropriate for every individual. Clients should consult appropriate investment, tax, legal, and other professionals regarding their specific circumstances before implementing any strategy. Investment Risks All investments and investment strategies involve risk, including potential loss of principal, and no strategy can guarantee a profit or protect against loss. Unless specifically stated otherwise, investments are not guaranteed or insured. Investment results may be affected by market conditions, interest rates, economic conditions, liquidity, tax considerations, legislative or regulatory developments, and other factors. Financial or tax-planning strategies may require the purchase, sale, retention, concentration, or restructuring of investments and may create additional risks, including reduced liquidity, restricted access to assets, longer holding periods, concentration risk, transaction costs, and other financial consequences. Clients should consider both potential tax benefits and the investment risks and economic consequences before proceeding. Past performance is not indicative of future results. No representation is made that any investment or strategy will achieve its objectives or that clients will experience results similar to those presented in examples, illustrations, or educational materials. Tax and Planning Risks Tax laws and regulations are complex, subject to differing interpretations, and may change. Tax-related strategies depend upon a client's individual circumstances and applicable laws, regulations, administrative guidance, and judicial decisions. There is no assurance that any strategy will reduce, defer, or eliminate taxes or achieve an anticipated tax result. A tax or financial planning strategy may be challenged, modified, limited, or disallowed by the Internal Revenue Service, state or local taxing authorities, courts, or other governmental authorities. Certain strategies may increase the likelihood of additional scrutiny or an audit and could result in additional taxes, interest, penalties, professional fees, or other costs if the intended tax treatment is not accepted. Changes in tax laws, regulations, interpretations, or a client's circumstances may adversely affect a strategy after implementation. Strategies appropriate under current law may become less advantageous, unavailable, or subject to different tax treatment. Strategies may also involve significant implementation or ongoing expenses, including legal, accounting, valuation, administrative, investment management, custodial, insurance, trustee, filing, or other professional fees. These costs should be considered in evaluating a strategy's potential benefits. Client Responsibilities and Professional Advice Implementation and maintenance of financial and tax strategies may require accurate and timely information from the client, ongoing participation, execution of documents, adherence to deadlines, and coordination among the client's investment adviser, accountant, attorney, insurance professional, and other advisers. Failure to provide complete information or timely complete required actions may reduce a strategy's effectiveness or result in unintended financial or tax consequences. Unless specifically agreed otherwise in writing, Horizon Wealth and HW Tax Strategies do not provide legal or accounting advice. Clients should consult qualified tax and legal professionals before implementing tax, estate, business, or other strategies involving legal or tax consequences. Conflicts of Interest Certain recommendations or strategies may create actual or potential conflicts of interest, including situations in which Horizon Wealth, HW Tax Strategies, an affiliated person, or another professional may receive compensation or otherwise benefit from a recommendation. Material conflicts are disclosed as required by applicable law. Clients should review applicable disclosures and agreements regarding fees, compensation, affiliations, and conflicts before implementing a recommendation. No Guarantee of Results Financial, investment, and tax planning involve assumptions about future events that cannot be predicted with certainty. Projections, illustrations, estimates, and examples are hypothetical unless otherwise indicated and are not guarantees of future investment performance, tax savings, or financial results. Actual results may differ materially from those anticipated. Clients should evaluate strategies based on their objectives, financial circumstances, risk tolerance, liquidity needs, tax situation, and other relevant considerations and consult appropriate investment, tax, accounting, and legal professionals before implementation. 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