Perspectives
The Tax Planning Most Sellers Start Too Late
Alex Lubyansky, Managing Partner, Acquisition Stars • September 3, 2026
Alex's Position
Alex Lubyansky's view: the tax planning that saves sellers the most money is also the planning most of them start too late. Qualified Small Business Stock treatment, state-specific structuring, and installment sale options all require lead time to qualify for and execute correctly. Brought in at the midnight hour, once a deal is already heating up, a lawyer or tax adviser can often no longer help a seller capture benefits that early planning would have preserved.
This page discusses federal tax concepts, including Qualified Small Business Stock under Section 1202, as background on deal structure and timing. It is not tax advice, and it is separate from securities law. QSBS thresholds and requirements change, so confirm current rules with your own tax adviser before relying on any of the planning described here.
Sellers preparing for a sale tend to think of tax planning as something their accountant handles closer to closing. Alex Lubyansky's experience across transactions is that this assumption is exactly what costs sellers the most money. The planning that produces the largest savings is also the planning with the longest lead time, and by the time a deal is moving, that lead time is often already gone.
The Benefit Sellers Don't Know They're Losing
Of the planning opportunities available to sellers, Alex points to one in particular as the most consequential and the most commonly missed.
"One of the hottest ones available right now is qualified small business. To meet the thresholds and the requirements to obtain it, it's often in the millions of tax savings. You really have to be strategic."
What makes this worth raising as its own topic, rather than a line item inside general deal prep, is how few sellers walk in already aware of it.
"Often some of these benefits are not actually known by the business owner, surprisingly enough."
Brought In At the Midnight Hour
Alex's consistent recommendation is to bring in specialized tax advisers, alongside legal counsel, early in the process rather than once a deal is already moving. The reason is structural, not just a matter of convenience.
"If it's something that is only brought up to you at the midnight hour, functionally, you simply can't obtain the benefits."
QSBS treatment, in particular, depends on qualifying facts that are set well before a sale, including entity formation choices and holding periods. There is no version of the process where a seller can retroactively arrange those facts once a letter of intent is already signed. The benefit either exists because it was built in early, or it does not exist at all.
State Lines Matter More Than Sellers Expect
Federal treatment is only part of the picture. Alex also flags state-specific exposure as a planning item that gets missed when tax planning starts late.
"You also have to look at state specific. Some entities are operating in various jurisdictions, and planning for that becomes very important."
Deal structure is not the only lever available, either. Alex also raises payment timing as a tool sellers underuse, pointing to installment sale structures and similar options as ways to mitigate tax impact when a straight lump-sum close does not fit the seller's situation. Like the rest of this planning, those options work best when they are on the table early, not proposed after a purchase agreement is already drafted.
The Deal Doesn't End at Closing
Alex's last point runs against the picture most sellers have of closing day. The wire hits the account, and the assumption is that the transaction is finished. His experience is that the legal and financial tail of a sale is usually much longer than that.
"If you're selling, I always recommend reps and warranties insurance, and making sure that you're covered from that standpoint."
"Very rarely is the deal done at the time of deal. Often the obligations extend for years, and that's something that should absolutely be explained and monitored and helped by the M&A attorney."
If You Are the Seller
Ask about QSBS eligibility, state-specific exposure, and installment sale options long before a deal is on the table, not once a term sheet is in hand. Bring in a specialized tax adviser alongside legal counsel early, and expect that some of the most valuable planning depends on facts that need to be true well before a sale process starts. Do not treat closing day as the finish line. Ask what indemnification and other obligations survive closing, for how long, and whether reps and warranties insurance makes sense for your transaction.
If You Are the Buyer
A seller who raises tax structure and post-close obligations early in the process is generally easier to close with, not harder. Alex's experience is that sellers who understand what they are actually going to keep after tax, and what they remain on the hook for after closing, negotiate with more realistic expectations and fewer surprises during the indemnification period. A seller who has never considered any of this is a seller whose expectations may shift meaningfully once those numbers become concrete.
Where the Standard Guide Differs
This page is Alex's own view on why tax and post-close planning gets started too late. For the structural tradeoffs behind deal timing and exit preparation, including how entity structure interacts with these outcomes, see the firm's business exit planning guide.
Planning a Sale?
Tell us about the transaction and your current timeline. We review every submission and respond within one business day. This is legal guidance on deal structure, not tax advice.
Submission Received
Your transaction details are under review. If there is alignment, we will be in touch.
Meanwhile, feel free to call us directly at (248) 266-2790
Frequently Asked Questions
What is QSBS and why does timing matter so much?
Qualified Small Business Stock, under Internal Revenue Code Section 1202, is a federal tax provision that can exclude a significant share of gain on the sale of qualifying C-corporation stock. Alex Lubyansky's experience is that meeting the thresholds and requirements takes proactive structuring well before a sale, not a scramble once a deal is already in motion. QSBS rules and dollar thresholds can change, so confirm current requirements with your tax adviser before relying on this planning.
Do most business owners already know about QSBS and similar planning opportunities?
No, according to Alex Lubyansky. He finds that many of these benefits are not actually known by the business owner going into the process, which is one reason he raises the question of tax planning awareness early rather than assuming a seller's accountant has already covered it.
Is legal counsel a substitute for a tax adviser in this planning?
No. Alex Lubyansky's approach is to work alongside specialized tax advisers rather than replace them, advising on the general planning picture and then bringing in a tax specialist to execute the structuring. The firm provides legal advice on deal structure, not tax advice, and QSBS eligibility should always be confirmed with a qualified tax professional.
Does a seller's legal and financial exposure end at closing?
Rarely, in Alex Lubyansky's experience. Representations and warranties, indemnification obligations, and other post-close commitments often extend for years after the transaction closes, which is part of why he recommends reps and warranties insurance and ongoing monitoring rather than treating the closing date as the end of the process.