The price you agree to isn't the number that lands in your account. Depending on how the deal is structured, taxes on the sale can take a real bite, and the gap between a well-planned sale and a rushed one is often tens of thousands of dollars, not a rounding error.
This page walks through the tax issues that come up when you sell a campground, organized by when they show up in the deal. If you already have a tax advisor who's handled a business sale before, use this as a gut check on what they should be covering. This isn't tax advice. It's the background you need to have a real conversation with whoever handles your taxes.
Before You Sign a Letter of Intent (LOI) or Term Sheet
The price on the LOI and what actually lands in your account after taxes are two different numbers, and the gap depends entirely on how the deal is structured. How the buyer assigns price across asset classes (called purchase price allocation) needs to be negotiated before you sign, because each category gets taxed differently. This is also the point to check whether your entity structure is set up well for a sale, and to clear up any outstanding filings, sales tax gaps, or payroll tax issues before diligence starts and a buyer finds them first.
During Due Diligence and Negotiation
Buyers will ask for reconciled financials and three years of tax returns, and some run a "quality of earnings" review on your numbers. You and the buyer's tax advisor will negotiate Form 8594, the purchase price allocation, before signing, since both sides have to report identical figures to the IRS. If part of your price is a seller-financed note, this is when installment sale treatment (IRC Section 453) gets modeled, including the fact that depreciation recapture is recognized as ordinary income in year one regardless of the note's payment schedule. Depending on your role in the business, the Net Investment Income Tax (an additional 3.8%) may apply. And every sales tax, payroll tax, and business tax obligation needs to be current; some states require a tax clearance certificate before they'll let the deal close.
At Closing
Form 8594 gets finalized with the buyer's side. You'll want estimated tax payments calculated so you're not hit with an underpayment penalty, final payroll tax filings and W-2/1099s handled, and real estate tax prorations confirmed.
After Closing
The UCC-1 financing statement gets filed to perfect your security interest in the note. It's worth confirming the license and permit transfers were actually completed, not just filed, and understanding your rights and remedies if a note payment is ever missed. Keep a signed copy of every closing document. Questions have a way of coming up later.
The Case for Hiring a Tax Advisor Who's Done This Before
A generalist tax advisor who's great at your annual return can still miss things that are specific to a business sale, and those misses are expensive. Get the allocation wrong and dollars that should be capital gains get taxed as ordinary income. Miss the Net Investment Income Tax or the installment sale rules and you're looking at a bigger bill, or an IRS notice, later. A specialist usually works faster, and their fee is small next to the cost of an error a generalist might let through. Ask directly whether they've actually handled deals like yours before you hire them.
If You Don't Have a Tax Advisor Yet
Look for someone who can point to a specific deal with a structure like yours, ideally an asset sale with seller financing. Use the questions and the sample letter below to vet candidates, and ask for a written scope and a flat fee or fee range rather than a vague hourly estimate.
Sample Request for Proposal Letter
This is a sample letter, not tax advice or a relationship with EverHaven. Adjust the details and treat your tax advisor's actual proposal, not this letter, as what you rely on.
Subject: Request for Proposal: Campground Sale
Hi [Tax Advisor Name],
I'm in the process of selling [Business Name] and would like your help with the tax side of the transaction. Before I sign anything, I'd like a proposal from you. Depending on how the deal ends up structured, that may include:
- Modeling my after-tax proceeds under the buyer's proposed structure, including the effect of depreciation recapture
- Reviewing and negotiating the purchase price allocation (Form 8594 / IRC Section 1060) with the buyer's tax advisor
- Advising on installment sale tax treatment (IRC Section 453) for the seller-financed portion, including what must be reported in year one regardless of the note's payment schedule
- Assessing whether Net Investment Income Tax could apply, based on my role in the business
- Getting my books and the last three years of returns diligence-ready for the buyer's review
- Coordinating final payroll, sales tax filings, and any state tax clearance certificates required at closing
- Filing Form 8594, and Form 6252 in each year I receive a note payment
- Advising on whether the entity should be restructured, wound down, or kept open after the sale
Please send me a written scope of work and a flat fee or fee range for the above, and a time we can meet to discuss it. I'd also like to hear about similar work you've done.
Thank you,
[Your Name]
What Should Be in Their Scope of Work?
Once a tax advisor responds, their proposal should turn into a written scope of work: a specific list of what they'll do, when, and for what fee. At minimum it should cover everything above: purchase price allocation, installment sale treatment, Net Investment Income Tax exposure, and your post-closing filings. If a proposal skips one of those, ask why before you sign it.
Questions to Ask Before You Hire
- Have you handled an asset sale with a seller-financed note before, not just valuation work?
- Is this a flat fee or hourly? What's the estimated range for a deal this size?
- Who on your team will actually be doing this work, and what are their qualifications?
- What's your availability over the next few months? Deals move fast once diligence starts.
One More Thing
This is information, not tax advice. Every deal and every state has details that change the picture, which is exactly why you're hiring a tax advisor in the first place.
Related Reading
- How to Sell a Campground
- How Long Does It Take to Sell a Campground?
- Should I Use a Broker to Sell My Campground?
- What Do Buyers Look For in a Campground?
- Legal Considerations for Selling Your Campground
- Selling a Family Campground: How to Protect Your Legacy
- Getting Ready to Sell: the full owner's checklist
Ready to take the next step?
Contact us confidentially for a no-obligation conversation. We can walk through this checklist together and answer any questions specific to your situation.