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Deal structure & proceeds

Net proceeds calculator

What the seller actually keeps after taxes, broker fees, legal, and payoffs.

LiveStructuringNot legal, tax, or financial advice
Written by
Avaz Bokiev
Reviewed by
Sukhrobjon (Rob) Ismoilov
Published Reviewed

The purchase price waterfall

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Bank loans, equipment finance, debt-like items.

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Usually zero. Sellers keep cash in a typical cash-free, debt-free deal.

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Positive if actual working capital exceeds the peg.

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Amount reinvested, not paid in cash.

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Held back for indemnity. Released later if clean.

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Usually 2–8% of enterprise value, scaled by deal size.

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Deal counsel. Separate from any transaction tax advisory.

Tax inputs

Rough federal + state. Confirm with your tax advisor before you commit.

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Original cost + capital improvements, less prior depreciation.

Long-term cap gain + NIIT
%
Ordinary income rate
%
State tax rate
%
Recapture as % of gain
%

Portion of the gain taxed at ordinary rates. Depends on asset vs. stock.

How to use it

Enterprise value and net-to-seller are two different numbers. This tool walks the price down through debt, rollover, fees, and tax to the dollars that actually land in your account.

  • Model asset vs. stock sale: stock sales usually reduce recapture.
  • Separate escrow from net-at-close — that money comes later, if ever.
  • Pair with rollover equity for the second-bite story.

What it returns

A line-by-line waterfall from enterprise value to net cash at close, with the effective tax rate on the gain.

Methodology

How this tool works

Enterprise value and net-to-seller are very different numbers. The waterfall walks EV down through debt payoff, rollover, escrow, working capital true-ups, and transaction fees, then applies a simplified federal and state tax calculation on the gain.

Depreciation recapture is treated at ordinary income rates; the balance of the gain gets long-term capital gain plus NIIT. Asset sales typically see more recapture than stock sales, which the structure toggle approximates. For a richer deal-structure walk-through, use the deal structure analyzer. For a focused tax view, use the tax estimator.

This model is for scenario planning. 338(h)(10) elections, F reorganizations, installment sales, and state nuance change the answer materially. For a specific deal, pair this with SBA financing considerations and a licensed tax advisor.

Sources

See also on mainstreetwealth.ai

FAQ

Frequently asked questions

Why is my net so much less than enterprise value?
Three big leaks: debt payoff, broker/legal/advisor fees (typically 3–10% of EV), and federal plus state tax on the gain. For a cash-free, debt-free deal with a 25% effective tax rate, net lands in the 60–70% range of EV.
Should I prefer an asset sale or a stock sale?
Buyers usually prefer asset sales (step-up in basis, better tax); sellers often prefer stock sales (lower recapture, less consent risk). The deal structure usually reflects a negotiated split of that gap.
How is my tax basis computed?
Original cost plus capital improvements, less accumulated depreciation. For most owner-operated home-services businesses, basis is low — most of the proceeds end up as capital gain.
What's a typical broker fee?
Scaled by deal size. Small deals (under $5M EV) usually see 8–10%; mid-market deals ($10–50M) see 3–6%. Full-service M&A advisory for home services typically runs 3–5% at the sizes we cover.
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Not legal, tax, or financial advice. For a specific recommendation, talk to a licensed advisor.