[Crawl-Date: 2026-04-06]
[Source: DataJelly Visibility Layer]
[URL: https://travisbusinessadvisors.com/zh/articles/net-proceeds-selling-business-what-you-actually-keep]
---
title: Sold for $2M? Here's What You Actually Keep
description: Net proceeds after a $2M business sale are typically $1.1M–$1.4M. Here's every deduction — broker, attorney, escrow, taxes — line by line.
url: https://travisbusinessadvisors.com/zh/articles/net-proceeds-selling-business-what-you-actually-keep
canonical: https://travisbusinessadvisors.com/articles/net-proceeds-selling-business-what-you-actually-keep
og_title: Travis Business Advisors
og_description: Austin's Business Broker for Owners Who Built Something Worth Protecting
og_image: https://storage.googleapis.com/gpt-engineer-file-uploads/attachments/og-images/598e6334-eb7e-4cdb-9bad-6a67b74e851b?Expires=1775422155&GoogleAccessId=go-api-on-aws%40gpt-engineer-390607.iam.gserviceaccount.com&Signature=XohJTtkAmsM6NTTTILYOicAWnVPn9C8RCQ9k%2Fn%2FmpCDFMbVeOM4XRpiB1SRlZzisI9hGBq67t7Elh5tKl6vxybSkR94jwptDGkvJFfPhm%2BxbX49eiEdX%2Bmy3Wo2t%2FRJOWybZmdE%2FM9d5a6QbvmWeDseCoNuvsP0ejJcjifGN62GUFqZQWv9oznuhXu0eE0WmDX4BRZi79sE0HYSJ1reAf9eTOueKDWPPjMIr%2FSO%2BcHEebakd679a0byTQHfqUxiWqMCP9cOu2zJwmbWEoFk%2FkUoOMzfjrtyMDbP%2BeEQMQIl22mwKx5qtqCr7hCojQgZF00diNfrALT5nOcvQDRiksQ%3D%3D
twitter_card: summary_large_image
twitter_image: https://storage.googleapis.com/gpt-engineer-file-uploads/attachments/og-images/598e6334-eb7e-4cdb-9bad-6a67b74e851b?Expires=1775422155&GoogleAccessId=go-api-on-aws%40gpt-engineer-390607.iam.gserviceaccount.com&Signature=XohJTtkAmsM6NTTTILYOicAWnVPn9C8RCQ9k%2Fn%2FmpCDFMbVeOM4XRpiB1SRlZzisI9hGBq67t7Elh5tKl6vxybSkR94jwptDGkvJFfPhm%2BxbX49eiEdX%2Bmy3Wo2t%2FRJOWybZmdE%2FM9d5a6QbvmWeDseCoNuvsP0ejJcjifGN62GUFqZQWv9oznuhXu0eE0WmDX4BRZi79sE0HYSJ1reAf9eTOueKDWPPjMIr%2FSO%2BcHEebakd679a0byTQHfqUxiWqMCP9cOu2zJwmbWEoFk%2FkUoOMzfjrtyMDbP%2BeEQMQIl22mwKx5qtqCr7hCojQgZF00diNfrALT5nOcvQDRiksQ%3D%3D
---

# Sold for $2M? Here's What You Actually Keep
> Net proceeds after a $2M business sale are typically $1.1M–$1.4M. Here's every deduction — broker, attorney, escrow, taxes — line by line.

---

Video Guide

Watch: What Happens to Your Money After You Sell

7 min

The wire hits your account. $2 million. For about three seconds, it feels amazing. Then the deductions start. Whether you're selling a service business in Austin or a manufacturing operation outside the Hill Country, that headline number shrinks faster than you'd expect.

Broker commission. Attorney fees. Escrow holdback. SBA loan payoff. Working capital adjustment. Prorated rent and utilities. Accounting fees for the quality of earnings report. Title insurance on the real estate component. Transfer taxes. Outstanding vendor invoices the buyer discovered in diligence. The repair credit you agreed to at the eleventh hour to keep the deal alive.

That $2 million is about to shrink. Fast.

Net proceeds after all transaction costs and taxes typically land between 55% and 70% of the headline sale price. On a $2 million deal, that's $1.1 million to $1.4 million in your pocket. Not $2 million. The owner who hasn't run this math before closing is in for a very expensive surprise — not because anyone cheated them, but because the gap between sale price and net proceeds is built into the structure of every deal.

Here's every line item. One by one.

## The Transaction Cost Stack

**Broker commission.** The standard business broker commission on deals under $5 million ranges from 8% to 12% of the sale price. On a $2 million deal, that's $160,000–$240,000. Some brokers use a tiered structure — a higher percentage on the first million, a lower percentage on the second. Others charge flat rates. But the commission is the single largest transaction cost, and it comes off the top.

Double-end deals — where the same broker represents both buyer and seller — sometimes reduce the total commission. But they introduce conflict-of-interest questions that merit scrutiny. Make sure you understand who the broker represents and how the fee is structured before signing the listing agreement.

**Attorney fees.** Your M&A attorney handles the purchase agreement, the asset vs. stock structure, escrow terms, representations and warranties, the non-compete clause, and every negotiation round that rewrites sections of the contract. Typical legal fees for a seller in a $2 million business transaction run $15,000–$50,000 — depending on deal complexity, negotiation intensity, and whether the purchase agreement goes through two drafts or twelve.

If the real estate is part of the deal, add title work, survey, and closing costs: another $5,000–$15,000.

**Accounting and advisory fees.** A quality of earnings (QoE) analysis — which the buyer may request or you may proactively commission — costs $15,000–$30,000. Your CPA's time for tax planning, recast financials, and deal support might add another $5,000–$15,000. If you engaged a valuation firm early in the process, that was $3,000–$8,000.

**Escrow holdback.** Most business sales include an escrow holdback — typically 5–15% of the purchase price — that sits in a third-party escrow account for 6–18 months post-close. The purpose: to cover indemnification claims if the buyer discovers problems after closing that were your responsibility under the purchase agreement. On a $2 million deal, a 10% holdback is $200,000 that you don't receive at closing. You'll get it back — assuming no claims — but not for months.

**SBA loan payoff.** If your business has an outstanding SBA loan, the balance is paid at closing from the proceeds. A $300,000 remaining loan balance reduces your net by exactly that amount. This isn't a "cost" — it's a liability that was always yours — but many sellers forget to subtract it when they mentally calculate their proceeds.

**Working capital adjustment.** Most purchase agreements include a working capital provision: the buyer acquires the business with an agreed-upon level of current assets (cash, receivables, inventory) minus current liabilities (payables, accrued expenses). If the actual working capital at closing falls below the agreed target, you write a check. If it exceeds the target, the buyer pays you the difference. Working capital adjustments of $20,000–$100,000 in either direction are common — and the seller who hasn't been tracking working capital during the months between LOI and close can be caught off guard.

**Prorations and adjustments.** Rent, utilities, insurance, prepaid expenses, deposits — all prorated to the closing date. These are typically smaller numbers, but they add up: $5,000–$15,000 in aggregate adjustments is normal.

## The Tax Hit

This is the number that transforms the conversation from "I sold for $2 million" to "I walked away with $1.2 million."

**Federal capital gains tax.** Long-term capital gains on business sale proceeds are currently taxed at 20% for most sellers in this income bracket. On $1 million in capital gains (after basis), that's $200,000 in federal capital gains tax.

**Net investment income tax (NIIT).** An additional 3.8% surtax applies to investment income above certain thresholds. On that same $1 million gain, that's another $38,000.

**State income tax.** Texas has no state income tax. This is a significant advantage for Austin sellers. A seller in California would face an additional 13.3% on the same transaction. Your Texas residence saves you six figures on a $2 million deal.

**Purchase price allocation.** This is the most consequential tax negotiation in the deal — and many sellers don't realize it exists until their CPA explains it after closing.

In an asset sale, the purchase price is allocated across different asset categories: inventory, equipment, real estate, goodwill, non-compete agreements, customer lists. Each category is taxed differently. Inventory and equipment may be subject to ordinary income rates (up to 37%). Goodwill is taxed at capital gains rates (20% + 3.8%). Real estate has its own treatment depending on depreciation recapture.

The allocation isn't fixed. It's negotiated between buyer and seller — and what's good for the buyer (more allocation to depreciable assets) is often bad for the seller (more allocation to ordinary income categories). This negotiation happens during deal structuring, and it needs to happen with your CPA's input from the beginning — not as an afterthought.

(For more on deal structures, see [The Tax Bill Is Coming: How to Structure Your Business Sale to Keep More of What You Earned](https://travisbusinessadvisors.com/articles/tax-planning-selling-business-structure-capital-gains) )

## The Timing of Proceeds: Understanding What Actually Arrives at Closing vs. Later

Here's the crucial timing issue that surprises many sellers: not all of the money arrives at closing. Some sits in escrow. Some comes later in installments. And some may never arrive if contingencies trigger clawbacks.

**Closing day proceeds.** You receive the purchase price minus commissions, attorney fees, loan payoffs, and prorations. On a $2 million deal, this is typically $1.4 million–$1.6 million. That's cash in your bank account on closing day.

**Escrow holdback (5–15%, 6–18 months post-close).** This money isn't available for your personal use. It sits in escrow as a safety net for the buyer. If the buyer discovers that your representations — "the business has no pending litigation," "all customer contracts are in good standing," "the financial statements are accurate" — were inaccurate, the buyer can file an indemnification claim against the escrow. A typical escrow arrangement holds 10% ($200,000 on a $2 million deal) for 12 months. After 12 months, assuming no claims, you receive the escrow release.

**Earnout provisions (typically 1–3 years post-close).** Some deals include earnout structures where the final purchase price depends on the business's post-closing performance. For example: $1.8 million at closing, plus up to $200,000 in earnout based on EBITDA targets over the next two years. The seller who expects a $2 million check but only receives $1.8 million at close — and then has to wait up to 36 months for the remaining $200,000, contingent on business performance — experiences a significant mismatch between expectations and reality. Earnout proceeds are paid by the buyer (or held in escrow) and released based on post-closing performance metrics. Seller funding of earnout through escrow is different — and much riskier — than buyer funding.

**Seller financing (seller note, paid monthly over time).** If you carry a seller note as part of the deal — say 15% of the purchase price over five years — you receive a monthly payment from the buyer instead of a lump sum at closing. On a $300,000 seller note at 7% interest, you receive roughly $5,700 monthly for 60 months. That's $342,000 in total proceeds received over the loan term (principal plus interest). But it's not all received at closing.

## Breaking Down the Real Timing

Here's a more realistic picture of when proceeds actually hit your account, using a composite $2 million deal:

**At closing (day 1):**

- Purchase price: $2,000,000
- Less: Broker commission (10%): –$200,000
- Less: Attorney fees: –$30,000
- Less: Accounting/advisory: –$20,000
- Less: SBA loan payoff: –$250,000
- Less: Working capital adjustment: –$40,000
- Less: Prorations: –$10,000
- **Cash received at closing: $1,450,000**

**Held in escrow (typically 12 months):**

- Escrow holdback (10%): $200,000
- Available: After 12 months, assuming zero indemnification claims

**Earnout provision (years 2–3, if applicable):**

- Earnout amount: $100,000–$150,000
- Timing: Released based on business hitting EBITDA targets
- Risk: If business underperforms, earnout may be partially or fully forfeited

**Seller note (if included):**

- Amount: $200,000
- Term: 60 monthly payments
- Timing: Monthly deposits over 5 years
- Risk: Dependent on buyer's continued financial health

**Total "proceeds" spread across time:**

- Immediate (day 1): $1,450,000
- Deferred (12 months): $200,000
- Contingent (24–36 months): $100,000–$150,000
- Deferred through note (60 months): $200,000 + interest

The seller who thought $2 million meant $2 million at closing discovers that $1.45 million is immediate, and another $0.5 million–$0.6 million is deferred or contingent.

## How to Optimize Your Proceeds

You can't eliminate transaction costs. You can't avoid taxes. But you can influence the net outcome through decisions made before and during the deal:

**Negotiate the broker commission.** Everything is negotiable. Tiered structures, performance bonuses tied to closing above a target price, and competitive broker interviews all create leverage.

**Manage the escrow.** Negotiate for the smallest holdback percentage and the shortest holdback period the buyer will accept. A 5% holdback for 6 months is materially better than 15% for 18 months — that's tens of thousands of dollars in opportunity cost.

**Minimize earnout exposure.** Earnout provisions transfer risk to the seller. If you get 80% of the sale price at closing and the remaining 20% is earnout-dependent, you've created a financial incentive for you to help the buyer succeed post-close (which can be positive) but you've also created risk that the earnout is never fully realized. Push as much of the purchase price as possible into fixed (closing day) proceeds rather than contingent (earnout) proceeds.

**Structure the tax allocation.** Work with your CPA to negotiate a purchase price allocation that maximizes capital gains treatment and minimizes ordinary income exposure. This conversation needs to start at the LOI stage, not at closing.

**Consider installment sales.** Under Section 453, spreading the sale proceeds over multiple tax years can reduce total tax liability by keeping annual income below higher bracket thresholds. The tradeoff: you don't receive all your money at closing. The benefit: you keep more of it after taxes.

**Minimize debt payoff surprises.** If you have the option to pay down SBA or other business loans in the months before closing, the proceeds at closing are cleaner and less confusing. Every dollar of loan paid down before closing is a dollar that doesn't disappear from the wire. Know your exact payoff amounts — including any prepayment penalties — before you get to the closing table.

**Time your closing strategically.** Closing in January versus December can shift an entire year of tax liability. If you're close to a year-end boundary, discuss timing with your CPA. The difference between recognizing the gain in 2026 versus 2027 might affect your bracket, your Medicare premiums, and your eligibility for certain deductions.

(For the full analysis of tax planning strategies, see [The Tax Bill Is Coming: How to Structure Your Business Sale to Keep More of What You Earned.](https://travisbusinessadvisors.com/articles/tax-planning-selling-business-structure-capital-gains) )

For the official IRS guidance on how asset sales are taxed, [Publication 544 — Sales and Other Dispositions of Assets](https://www.irs.gov/publications/p544) covers capital gains treatment, depreciation recapture, and installment sale reporting. It's dense reading, but your CPA should be able to walk you through how each section applies to your specific deal.

## The Number That Matters

Sellers celebrate the sale price. But the only number that matters is the net — the amount that lands in your account after every commission, fee, holdback, adjustment, loan payoff, and tax payment is subtracted.

And equally important: understand *when* that money arrives. Not all at closing. Some in escrow. Some as earnout. Some as deferred seller financing. The seller who understands this cash flow timing going into the deal avoids the shock of discovering that $2 million in proceeds doesn't mean $2 million at closing.

Run this math before you accept an offer. Not after. Not at closing. Not when your CPA hands you the final accounting six weeks later. Before.

Because $2 million sounds like freedom. But $1.2 million — arriving over time, with some held in escrow and some contingent — requires a different plan. And you want that plan built before the wire hits your account, not after.

## Structured Data (JSON-LD)
```json
{"@context":"https://schema.org","@type":"Article","headline":"You Just Sold Your Business for $2 Million. Here\u0027s What Happens to That Money Before You See a Dime.","description":"Net proceeds after a $2M business sale are typically $1.1M\u2013$1.4M. Here\u0027s every deduction \u2014 broker, attorney, escrow, taxes \u2014 line by line.","image":"https://travisbusinessadvisors.com/infographics/net-proceeds-reality-check.jpg","author":{"@type":"Person","name":"Slava Davidenko"},"publisher":{"@type":"Organization","name":"Travis Business Advisors","url":"https://travisbusinessadvisors.com"},"datePublished":"2025-12-09","dateModified":"2025-12-17","mainEntityOfPage":"https://travisbusinessadvisors.com/articles/net-proceeds-selling-business-what-you-actually-keep","timeRequired":"PT9M","articleSection":"Post-Sale Reality","inLanguage":"en-US"}
```

```json
{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://travisbusinessadvisors.com"},{"@type":"ListItem","position":2,"name":"Sell Your Business","item":"https://travisbusinessadvisors.com/thinking-of-selling"},{"@type":"ListItem","position":3,"name":"Articles","item":"https://travisbusinessadvisors.com/articles"},{"@type":"ListItem","position":4,"name":"You Just Sold Your Business for $2 Million. Here\u0027s What Happens to That Money Before You See a Dime."}]}
```

```json
{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://travisbusinessadvisors.com/"},{"@type":"ListItem","position":2,"name":"Sell Your Business","item":"https://travisbusinessadvisors.com/thinking-of-selling"},{"@type":"ListItem","position":3,"name":"Articles","item":"https://travisbusinessadvisors.com/articles"},{"@type":"ListItem","position":4,"name":"You Just Sold Your Business for $2 Million. Here\u0027s What Happens to That Money Before You See a Dime."}]}
```


## Discovery & Navigation
> Semantic links for AI agent traversal.

* [TravisBusiness Advisors](https://travisbusinessadvisors.com/)
* [About](https://travisbusinessadvisors.com/about)
* [Sell Your Business](https://travisbusinessadvisors.com/thinking-of-selling)
* [Buy a Business](https://travisbusinessadvisors.com/thinking-of-buying)
* [Industries](https://travisbusinessadvisors.com/industries)
* [Start a Confidential Conversation](https://travisbusinessadvisors.com/contact)
* [Articles](https://travisbusinessadvisors.com/articles)
* [Privacy Policy](https://travisbusinessadvisors.com/privacy)
* [Terms of Use](https://travisbusinessadvisors.com/terms)
* [Case Studies](https://travisbusinessadvisors.com/case-studies)
* [Glossary](https://travisbusinessadvisors.com/glossary)
* [FAQ](https://travisbusinessadvisors.com/faq)
* [Videos](https://travisbusinessadvisors.com/videos)
* [Infographics](https://travisbusinessadvisors.com/infographics)
* [Interactive Tools](https://travisbusinessadvisors.com/tools)
* [Seller Guide](https://travisbusinessadvisors.com/seller-guide)
* [Buyer Guide](https://travisbusinessadvisors.com/buyer-guide)
* [Take the Quiz](https://travisbusinessadvisors.com/journey)
* [Journey Map](https://travisbusinessadvisors.com/journey#map)
* [(878) 888-2552](tel:8788882552)
* [vd@travisbusinessadvisors.com](mailto:vd@travisbusinessadvisors.com)
* [Disclaimer](https://travisbusinessadvisors.com/disclaimer)
* [Accessibility](https://travisbusinessadvisors.com/accessibility)