Here's How Goodwill is Taxed When Selling a Business (EXPLAINED)

“How is goodwill taxed when selling a business?” This is a common question for any entrepreneur thinking about their exit strategy.For many business owners, selling away their life's work still means a pretty big deal financially. However, negotiating the tax implications of deals that huge can be difficult, especially when it’s about a specific intangible asset—goodwill.Worry not; our comprehensive guide digs into the taxation of goodwill when selling a firm, providing an easy-to-follow roadmap to help entrepreneurs make informed decisions. Continue reading to learn about the definition of goodwill, its significance in business valuation, and the specific tax regulations that govern its treatment upon sale.TL;DR - What Happens to Goodwill When You Sell a Business?Goodwill is your company's intangible value beyond its physical assets.When you sell goodwill, the buyer pays handsomely for it.There's a catch, though—the seller must pay taxes on the profits.The good news is that it is typi...