A recent CNBC article by Cheryl Winokur Munk highlights how the One Big Beautiful Bill (OBBB) is reshaping the tax landscape for small business owners planning an exit. The law’s expansion of Qualified Small Business Stock (QSBS) benefits has already sparked new conversations between sellers, advisors, and M&A professionals with good reason.

Under the OBBB, the tax-free gain cap for qualifying C corporations rose from $10 million to $15 million, and the holding period dropped from five years to three. Meanwhile, the asset eligibility cap jumped from $50 million to $75 million, broadening access to companies that would have been excluded before. For some founders and owners considering a sale within the next few years, this could mean, potentially, millions in additional after-tax proceeds and a fresh reason to revisit corporate structure and timing.

A Boon for Prepared Sellers and a Wake-Up Call for All Others

“Changes like this tend to reward the proactive,” said Garrett Monroe, Sell-Side Managing Director at Calder Capital. “When you layer in shifting tax law with unstable plans for an exit, that lack of preparation can cost real money. Owners with formalized valuation or estate strategies may find it worthwhile to consider pursuing these new tax benefits.”

According to the Exit Planning Institute, 58% of boomer business owners plan to sell within five years, yet over one-quarter lack a formal valuation or exit plan. Monroe notes that while the OBBB creates a new avenue for meaningful upside for eligible sellers, it doesn’t eliminate the need for expert planning.

“This tax law has created an opportunity,” Monroe states, “but it has also created new complexities. You can’t capture the upside if you’re not structured correctly and have time before an exit.”

Should Sellers Time the Market and Consider Restructuring?

The OBBB may make C-corp conversion newly attractive, especially for companies that expect growth or acquisition interest within three to five years. But as CNBC points out, that shift comes with tradeoffs: double taxation and the need for disciplined cash management.

“C corp status won’t be a silver bullet to maximize gains,” said Max Friar, Managing Partner at Calder Capital. “It’s a tool. Some owners who can wait to sell, are large enough, and in an eligible industry, are the ones viewing this as part of a larger exit play. Structuring, timing, and valuation should all move in sync if this is something of interest to you. That’s where a sell-side advisor, a wealth advisor, and a strong CPA partnership add serious value.”

Friar added that while tax incentives can accelerate market activity, they can also distort it. He states, “while it is helpful to understand the benefits this bill could offer business owners, our assessment is that if you are ready to sell, the opportunity cost of waiting and doing the conversion may not be meaningful enough.”

Looking Ahead

At Calder Capital, we believe the new tax policies in the One Big Beautiful Bill could create a lucrative opportunity, but only for those who plan early, have at least three years to plan an exit, and execute precisely. Converting to a C corp or repositioning for QSBS benefits requires cost, foresight, coordination with tax professionals, and a realistic understanding of valuation dynamics in the lower middle market. For some sellers, the benefit may not exist for them either.

Calder’s research shows that these changes will mostly or only have a material impact on an owner who is willing to do a C-Corp conversion and is a minimum of three years from selling. We have also found that this provision will largely only benefit companies selling at a valuation of $10 million or more and are in certain industries. So there is a chance that many lower middle market businesses have very little to gain, if anything.

“When the tax code changes, it is worth becoming informed to see if you could strategically benefit,” said Monroe. “Owners who take the time now to assess their structure, their timeline, obtain a valuation, model the potential benefits, and align with their advisors will be the ones who win when it’s time to sell – regardless if they can benefit from these changes.”

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About Calder Capital:

Founded in 2013, Calder Capital is a cross-industry mergers and acquisitions advisory firm with offices across the United States. Calder provides valuation, sell-side, and buy-side services. We are nationally recognized for excellence in advising $1-100M enterprise value transactions in manufacturing, construction, distribution, and business services. Calder serves business owners, entrepreneurs, family offices, financial buyers, and investors. Learn more at www.CalderGR.com.