Business Sale $5-10 Million: Advanced Strategies and NIIT Planning

At $5-10M, the 3.8% Net Investment Income Tax, Opportunity Zones, and charitable remainder trusts all become valuable tools. Model advanced strategies carefully.

Net Investment Income Tax hits. The 3.8% NIIT under Section 1411 applies to your capital gain once modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly). On a $5M+ gain, that is an additional $190,000 or more in federal tax alone, making mitigation strategies essential.

Opportunity Zone reinvestment. Section 1400Z-2 allows you to defer capital gains by investing in a Qualified Opportunity Fund within 180 days of the sale. While the original tax basis step-up benefits expired after 2026, gains on the Opportunity Zone investment held 10+ years can still be excluded from income.

Charitable remainder trusts. A CRT lets you transfer appreciated assets before the sale, receive an income stream, get an upfront charitable deduction, and avoid immediate capital gains tax. At this deal size the economics justify the setup and administration costs.

The tradeoff: More strategies are available, but each adds complexity and advisory fees. A CPA helps you model which combination of deferral, charitable, and reinvestment strategies nets the best after-tax outcome for your specific situation.