Subscribe: Apple Podcasts · Spotify · YouTube · Amazon Music · iHeartRadio · Pandora · RSS
Episode Summary
You’ve got an S-corp, a couple of LLCs, real estate peeled off into its own entity, and a CPA who’s been with you since the early days. The taxes get filed, the financials look clean, and you tell yourself you’re three to five years from selling. Then the out-of-the-blue offer lands, and you find out at the deal table that the election your accountant made eight years ago to save on payroll taxes just cost you $6.5 million at close. I had Todd Ganos back for round three because he’s the rare advisor who actually lives at the intersection of tax law, deal structure, and estate planning. We got into the structural decisions owners are making in vacuums, why 95% of deals are asset sales (and what that means for your entity), depreciation recapture that shows up at the closing table when nobody warned you, IRS private letter rulings that bind the agency before you sign, and the simple math of required capital versus excess capital that should drive every planning decision. Real numbers throughout. Real owners who got crushed because nobody quarterbacked their advisor team.
Watch on YouTube
## Top 10 Takeaways- You say three to five years from selling like every other owner. That’s exactly why the planning never gets done.
- Out-of-the-blue offers force you to close on the structure you have, not the structure you wish you had.
- Asset sales win 95% of deals because buyers won’t inherit your entity’s hidden liabilities.
- An S-corp election made to save on payroll taxes can cost you millions at exit by killing your planning options.
- Depreciation recapture hits as ordinary income on equipment you wrote off, and you find out at the deal table.
- IRS private letter rulings bind the agency before you sign, turning “I think this works” into “they agreed this works.”
- Required capital is your annual budget times twenty. Everything above is excess capital, and that’s what you plan around.
- Estate planning $5M of excess capital is easy. Estate planning $40M because you waited is not.
- Your everyday CPA might see one $20M sale in a career. They don’t get asked the questions you need answered.
- One advisor working in a silo can undermine every structural move the rest of your team just put in place.
Sound Bites
“Had they not given us the heads up, they would have been sucked into the state to the tune of $2 million.” (@00:15:08) — Todd Ganos
“It would end up being about $6.5 million of tax difference, which could make a break whether you even want to sell the company.” (@00:16:31) — Todd Ganos
“It is one thing to do a transaction. You say, ‘I think it’s going to work.’ The IRS on audit does not know what your state of mind was when you did this.” (@00:26:04) — Todd Ganos
“You’re choosing to solve for annual income instead of solving for value creation on your net worth and on your business. If you shift that mindset, you’re literally going from two-dimensional to three-dimensional thinking.” (@01:03:53) — Ryan Tansom
“A business owner’s decision to defer planning instead of doing it now is a de facto being the general contractor.” (@01:01:11) — Todd Ganos
About This Episode
Todd Ganos is the founder of Integrated Wealth Counsel and a Forbes contributor focused on advanced tax and estate planning for middle-market business owners. He holds an advanced law degree in taxation, passed the CPA exam, served as an Air Force officer, and has been both a buyer and a seller of his own businesses. This is his third appearance on the show. Ryan first met Todd at an EPI event years earlier and credits him with permanently changing how he thinks about the planning side of an exit. The conversation is structural tax and estate planning territory, distinct from the value-building work inside the business.
Resources Mentioned
- Integrated Wealth Counsel — Todd’s firm. — integratedwealth.com
- Todd Ganos on Forbes — Search “Todd Ganos Forbes” for his column covering many of the topics in this episode.
- Todd’s email — todd@integratedwealth.com
- IRS Private Letter Ruling process — Referenced for advance certainty on tax characterization of proposed transactions.
- Internal Revenue Code Section 1202 — Referenced for the C-corp gain exclusion the medical device owner missed.
- Internal Revenue Code Section 199A — Referenced for the qualified business income deduction and why some owners peel off administrative functions into a separate entity.
Connections
Phase + Module:
- Module 7 — Leadership Team — Team of advisors as a leadership discipline that either compounds or compromises net proceeds at exit.
Milestones:
- Milestone 3 — Net Worth & Valuation Targets — Required capital vs. excess capital is the math underneath this whole conversation.
- Milestone 6 — Transaction Value — Asset sale vs. entity sale, recapture, state-level taxation all land here.
Concepts referenced:
- Enterprise Value vs. Equity Value — The asset sale vs. entity sale decision and what it does to your net proceeds.
- The Four Value Levers — Tax structure as a structural lever on what actually hits your bank account.
- Normalized EBITDA — The underlying cash flow every planning decision sits on top of.