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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: joseffy who wrote (682156)	11/1/2012 4:31:46 PM
From: Brumar89	Respond to of 1575348

Attaway.

To: joseffy who wrote (682156)	11/1/2012 4:33:21 PM
From: joseffy	Respond to of 1575348

Looming Capital-Gains Tax Hike Motivates Owners to Sell By JOHN D. MCKINNON October 31, 2012 online.wsj.com A looming increase in the capital-gains tax rate next year is fueling sales of some privately-held businesses. Many business owners—mostly founders who could gain a lot from a sale—are looking to close deals before next year, when the maximum tax on investment income is scheduled to rise from 15% currently to at least 23.8% on most capital gains, at least for higher-income households. Many sellers intend to convert their equity into retirement funds or just start anew. Bert Wolf of Acetylene Oxygen in Harlingen, Texas, says he plans to sell his compressed-gas business before 2013. Many business owners are looking to close deals by year's end. "It just made more sense for me to take my chips off the table and go do something else," said Bert Wolf, 60 years old, who has an agreement to sell his compressed-gas business, Acetylene Oxygen Co. of Harlingen, Tex., before year-end. Mr. Wolf added that if he waited until after the tax increase to sell, he would have to expand the business at the current rate "for at least 3 or 4 more years to achieve the same after-tax sales dollar." He is profiting on the sale of his business to Praxair Inc., PX +2.13% a public company. "There's a kind of a panic on to get things done," said Beatrice Mitchell, co-founder of Sperry, Mitchell & Co. Inc., a New York investment bank that is advising Mr. Wolf on the sale. To be sure, the weak economy has been difficult for many small-business owners across the board. The median selling price for U.S. small businesses in the quarter ended Sept. 30 was $174,000 down 8.2% from four years earlier, according to BizBuySell.com, an online small-business marketplace. The firm's findings are based on sales, reported voluntarily by business brokers and mostly of less than $1 million, in 70 major markets. Leonard Ramirez and his wife built up their Houston-based oil drilling supply business, Drilling & Production Resources Inc., over 25 years. They sold it last year to PGI International, a manufacturer of precision parts and systems, partly to avoid the possible capital-gains increase, according to Mr. Ramirez. The owners of IM Solutions LLC, a Dallas-based online marketing company that serves the legal industry, figured the expected tax increases in 2013 would eat up about 8.8% of the proceeds from selling their business, said company president John Emerick. That 8.8% chunk could be up to $1 million or more of his share, he said. "It was pretty clear to us that it made more sense for us to pull the trigger early," Mr. Emerick said. "For me—I'm 49—I'm thinking I might not earn that much for the rest of my life. The earnings for the rest of my life would be equivalent to the tax I'd be paying by waiting until 2013." The owners sold the business to LeadingResponse LLC in a deal financed by Huron Capital Partners, a private-equity group, closing on the sale in July. A version of this article appeared November 1, 2012, on page B5 in the U.S. edition of The Wall Street Journal, with the headline: Looming Tax Hike Motivates Owners to Sell.