Exit Planning in an Election Year: What Businesses Need to Know

As election cycles bring an influx of political messaging and speculation, business owners face a unique challenge: planning an exit amid legislative uncertainty.

In an election year, the landscape can shift quickly, making proactive preparation essential for any owner contemplating a transition. After guiding entrepreneurs through multiple election-year exits, my clearest advice is this: informed planning is the advantage. Understanding how policy shifts may influence taxes, valuations, and timing can safeguard your transition and preserve long-term wealth.

Legislative Uncertainties

Uncertainty is unavoidable during an election year, particularly when potential changes in tax law could alter the outcome of an exit. Business owners often accelerate transitions before year-end when new administrations may adjust capital gains rates or corporate tax structures. Key tax provisions at risk include the qualified small business stock election, which allows the first $10 million of C corporation stock to be excluded from tax. Similarly, rules governing charitable trusts and new stock issuance may be reshaped depending on which party gains control of Congress and the White House. The scheduled reduction of the estate tax threshold in 2026 further heightens the importance of strategic planning. Across these variables, vigilance and adaptability become essential.

Mitigating Challenges

While the future cannot be predicted, it can be prepared for. The strongest exit strategies are built early and evolve with changing policy environments. I encourage business owners to stay engaged in the political process while maintaining a focus on how legislation, proposals, and post-election movements may influence their long-term plans. After election day, attention should shift toward evaluating the new policy agenda, such as the Wyden tax plan, and adjusting transition strategies accordingly. Owners should prepare not just for the exit itself, but for the business environment they will operate within until that moment arrives.

Exit planning during an election year requires discipline, foresight, and structured decision-making.

With potential tax reforms, legislative shifts, and increased volatility, owners who stay informed and proactive are best positioned for a successful transition. If you need help navigating these complexities, Masterpiece Capital is ready to support you with clarity, strategy, and experience.