Employee Ownership Trust feasibility checklist

Is the business a fit?

• Consistent profitability. The business earns enough, reliably, to fund your buyout over time from its own cash flow.
• Management depth. A team that can run the business without you after you step back.
• You value legacy. Keeping the business independent and local matters to you, not just the top price.
• Patience on payout. You're comfortable being paid over several years rather than all at closing.

The tax exemption (with caveats)

• Up to $10 million. A qualifying sale to an EOT can shelter up to $10 million in capital gains — far more than the standard exemption.
• Shared, not per person. The $10 million is shared among the sellers on the same transfer, not $10 million each.
• The 2024–2026 window. As currently legislated, the exemption applies to qualifying sales in a limited window — confirm the current rules before you plan around it.
• Conditions and clawback. Strict conditions apply to the business, the trust, and the transaction, and the exemption can be clawed back if conditions are broken.

Timing and next steps

• Lead time. An EOT sale takes months to structure — if the window matters to you, the time to look is now.
• Accountant involved. Bring your accountant in early; the tax analysis is central.
• Feasibility first. A focused assessment answers the go / no-go question before you commit — and shows the alternatives if it's a no.