By Dr. Tamara Patzer
In brief: A founder who sells a company can cross New York’s estimated top 1% income line of $959,562 in a single year and then face a different problem: a portfolio to manage and no business to run. This feature walks through the first year after a sale, the federal figures that matter, and the questions a New Orleans tax attorney says to ask before and after closing.
Founders rehearse the closing. Few rehearse the morning after. The wire arrives, the company belongs to someone else, and an owner who has measured life in payroll cycles is suddenly responsible for a very different kind of balance sheet. Todd M. Villarrubia, a tax and estate attorney in New Orleans, wrote Entrepreneurial B.E.A.S.T. Mode™ in part about that morning. His line is short: “Exit planning doesn’t conclude with the sale.”
Does A Sale Put An Owner In The Top 1%?
For the year of the sale, often. A 2026 projection puts the adjusted gross income needed to reach the top 1% of New York filers at $959,562. The projection carries 2022 IRS return data forward to 2026 and counts filers, not households. A sale can lift one year’s income far above that line even when the owner’s income in every other year sits well below it.
The label is temporary, and the effect is not. The tax bill for that year is real, and so are the decisions that follow.
What Are The Main Federal Figures In A Sale Year?
Three are worth knowing. First, gains on assets held longer than one year are taxed at 0, 15, or 20 percent. The 20 percent rate in the IRS’s 2025 table kicks in at $533,400 (single) and $600,050 (joint).²
Second, the Net Investment Income Tax adds 3.8 percent above modified adjusted gross income of $200,000 (single), $250,000 (joint), or $125,000 (married filing separately). Third, the IRS lists higher maximum rates of 28 percent and 25 percent for certain categories, among them collectibles, the taxable part of qualified small business stock and unrecaptured section 1250 gain.
Those are not a forecast. Which figures apply to a given sale depends on the type of asset, the structure of the deal, and the owner’s other income.
What Does The Money Do To The Owner’s Balance Sheet?
It changes its shape. Before the sale, most of an owner’s net worth sat in one illiquid asset. After it, the same value is cash and securities, and the owner has to decide how to hold it. The risk shifts from concentration in a company to the habits of a new kind of investor.
Villarrubia makes a point that goes beyond mechanics. Building value and preserving value call for different skills, and the second is not a continuation of the first. The book urges owners to bring in advisers who understand the new situation, not to assume the old ones fit.
Will The Owner Feel Wealthy?
Perhaps not at once. Schwab’s 2025 poll puts the average American’s definition of wealthy at $2.3 million and of financially comfortable at $839,000.⁴ A seller who has just received a large sum may measure it against those numbers, against the taxes due and against the lifestyle they expect to keep.
The adjustment is as much emotional as financial. A person who defined themselves by running a company has to decide what comes next.
What Should An Owner Settle Before Closing?
A short list prevents most of the surprises:
- A tax model for the year of the sale, with the assumptions written down.
- A plan for the proceeds that someone other than the buyer’s banker helped to write.
- An agreement among advisers about who coordinates the first year.
- A family conversation about what the sale means for everyone.
- A date to revisit the plan once the first year is complete.
Villarrubia’s phrase for the underlying idea is that an owner should build a coordinated team around the whole picture. His book’s line about advisers applies here: “the quality of your advisors determines the ceiling on your legacy”.
What Does The First Year Look Like In Practice?
The first quarter is mostly logistics: the wire, the escrow, the transition agreement. The second is about decisions, such as where the money sits and who manages it. The third brings the tax filing and the first honest look at what the sale cost and produced. The fourth is for a conversation with the family and advisers about whether the plan is working.
Each stage has traps. The most common is moving quickly into investments that the owner does not understand. The second is waiting so long to decide that the money sits idle and the family drifts apart on what it was for.
How Should The Family Be Told?
Before the news is public, and in plain terms. Spouses, children, and anyone who depends on the owner’s income deserve to hear what the sale means for them: what changes, what does not, and who will manage the proceeds. Silence invites guesses, and guesses tend to be worse than the truth.
The book returns to this theme often. Transferring money is a legal event. Transferring understanding is slower, and it is what keeps a windfall from becoming a source of conflict.
Does Location Change The Plan?
It can. An owner who lives in New York at the time of the sale faces New York rules, and an owner who plans to move afterward faces a different set of questions. State rules are not covered here. The point is to ask early, since moving residence around the time of a sale raises timing issues that a licensed tax professional should handle.
What Should A Seller Do In The First Thirty Days?
Pause. Resist large decisions about spending, giving or investing until the advisers have met and the tax picture is clear. Park the proceeds somewhere safe and boring while you plan. Write down what you wanted the sale to accomplish, and check each early decision against that list. The first month sets habits, and a calm start makes the rest of the year easier to manage.
Common Questions
Should I Plan For The Sale Before I Have An Offer?
The book’s answer is yes. Early planning keeps more choices open.
Is The Top 1% Label Useful After A Sale?
Only as information about that year’s return. Net worth and income are separate things.
Who Should I Call First?
A licensed attorney and a tax professional, ideally together, before you sign anything.
Sources
- SmartAsset, Income Needed to Be in the Top 1% in Every State (2026)
- Internal Revenue Service, Topic no. 409, Capital Gains and Losses
- Internal Revenue Service, Topic no. 559, Net Investment Income Tax
- Charles Schwab, 2025 Modern Wealth Survey (Business Wire)
About the author. Dr. Tamara Patzer is a publisher and former newspaper editor. She was on the staff of The Charlotte Sun when it was named a 2005 Pulitzer Prize finalist for its Hurricane Charley coverage.
About the source. Todd M. Villarrubia is an attorney with an LL.M. in Taxation and a Juris Doctorate. He is an Accredited Estate Planner, a Board Certified Expert in Estate Planning and Administration, and a Fiduciary Investment Advisor Representative. He is the author of Entrepreneurial B.E.A.S.T. Mode™.
Wealth Planning Law Group
101 W. Robert E. Lee Blvd., Ste 404, New Orleans, LA 70124
Phone: 504-982-8207 | Email: todd@lawealthplan.com
Website: Wealth Planning Law Group
Disclaimer: Attorney advertising. Sponsored feature written on behalf of Todd M. Villarrubia. This article is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. Results vary.
