Navigating Ownership Transition in an Era of Change

Changes in the economic and political landscape often influence the way business owners strategize about an upcoming ownership transition. Staying up-to-date on the impact of legislation is another way for business owners to be proactive and ensure they are making the best decisions for the long-term.

Currently, business owners should be aware that some of the main provisions of the Tax Cuts and Job Act (“TCJA”) of 2017 are set to end soon. The TCJA was put into place on December 22, 2017, and has an expiration date of December 31, 2025. It amended the Internal Revenue Code (“IRC”) with the aim of lowering tax rates and increasing deductions for both individuals and businesses. Unless Congress decides to extend some or all of the TCJA’s provisions, both individuals and business owners—especially those transitioning ownership—need to begin planning to make the most of any available tax savings that will expire on December 31, 2025.    

What Changes Come with the Expiration of the TCJA?

The TCJA planned for the sunset of a number of its changes. In other words, on January 1, 2026, parts of the U.S. tax code will return to the way they were before the TCJA was initially signed into law. Here are some examples:

Be Proactive…Planning Takes Time

There is, of course, the possibility that Congress may make changes to the TCJA before it expires on December 31, 2025. However, due to the uncertainty of the current political environment, it is imperative to be proactive and plan as if the TCJA will expire as planned. Whether you will continue to operate your business or move forward with an ownership transition event, it is a good idea to work with your trusted estate or tax advisor to determine whether there are any steps you should be taking to best position yourself for future success.

What Strategies May Be Available?

Creating strategies in a time of change requires owners to think ahead so that they can achieve the best possible outcome for their business and for the future of everyone involved. With regard to the expiration of the TCJA, there are many potential tax planning strategies that can help your company find the best way forward. Some strategies to consider are:

How Will a Qualified Appraisal Best Prepare You for Anticipated Changes?

Many of the strategies discussed previously are dependent on the valuation of your business. Changes in the economy or the market in which your company operates are important factors that impact the overall valuation of your business for estate and gift tax purposes. Prairie Capital Advisors can work with you to prepare a qualified appraisal as part of your estate and gift tax planning.

Start Preparing Today

Navigating change does not have to be overwhelming. Planning now to create an intentional and well-thought-out plan to address the sunsetting of the TCJA will have a lasting and positive impact on your business and the people you care about the most. If you are working on an ownership transition, think strategically about whether you should accelerate the process before tax rates increase. Most importantly, you don’t want to wait to start any of these processes until a year from now. Beginning the process NOW will keep you from rushing through life-changing decisions. Lastly, have you thought about your long-term goals? Share these with your legal, accounting and financial advisors so that you can get started on an effective plan to get the best outcome for your future.

Melissa Goetz a Vice President at Prairie Capital Advisors, Inc. She can be contacted at 785.560.3511 or by email:

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