Bush-era tax cuts set to expire
The tax cuts set in motion in the Bush-era are scheduled to expire at the end of 2012, which would raise the long-term gain rate from 15% to 20%. Two other increases that apply to couples earning over $250,000 per year could raise the capital gain rate from 15% to 25%.
Although an increase or decrease in taxes is not a sensible reason to sell a newspaper company, it becomes quite important if a sale is already being considered in the near future.
In a seller financed sale there is a federal provision allowing the seller to recognize all the income from the installment sale in the year of the sale, which allows the seller to pay capital gains taxes on the entire gain at that time. It may be very helpful for a seller who is financing a sale to use this provision – and lock in the gain tax rate of 15%, avoiding a potential future increase.