How much of my business sale proceeds should I set aside for taxes?
There is no standard share to set aside. Depending on how the transaction is structured, a sale can involve several assets whose gains are figured separately, so part may be capital gain and part may be taxed as ordinary income. The amount depends on the agreement, your basis, how the price was allocated and the rest of your income for the year.
Three different questions are involved: what the final tax for the year is likely to be, whether estimated payments are required during the year, and how penalties for underpayment can be avoided. A large gain alone does not settle the second question; that depends on IRS tests applied to your whole tax picture. The practical step is to get the CPA's written estimate early and hold that amount apart from money you plan to spend or invest.
Reviewed by Bay Area Wealth Advisors. Last reviewed 2026-10-06. Educational information only — not individualized financial, tax or legal advice.