Short answer: the number that matters isn’t the headline sale price — it’s what lands in your account after taxes, paying off practice debt, transaction fees, and any part of the deal you don’t get in cash today. That “cash in hand” figure is often meaningfully lower than the sticker price, and estimating it before you sell is what makes the number real.
Why isn’t the sale price what I keep?
Because several things come out of the price before it reaches you. Think of the sticker price as the top line and your “cash in hand” as the bottom line — the gap between them is taxes, debt, fees, and deal terms. Focusing on the top line is how sellers end up disappointed at closing.
What reduces your net proceeds?
| Step | Effect |
|---|---|
| Sale price | The headline number |
| − Taxes | Capital gains and possibly ordinary income (see below) |
| − Practice debt payoff | Any loans on the practice are settled at closing |
| − Transaction fees | Broker, legal, accounting, and advisory costs |
| − Deferred/at-risk amounts | Earnouts or equity rollover you don’t get in cash now |
| = Cash in hand | What actually funds your next chapter |
How do taxes affect the number?
A lot — and it depends on how the price is allocated across assets. Some of a practice sale is typically taxed at favorable capital-gains rates and some at higher ordinary rates, which is why the tax structure of the sale and whether it’s an asset or stock sale can swing your net by a large margin. This is where planning with your CPA before signing pays for itself.
How does deal structure change what you pocket now?
How do you estimate it before selling?
Start with a realistic value (our valuation calculator is a starting point), then subtract estimated taxes, remaining debt, and fees, and separate guaranteed cash from deferred amounts. Doing this early tells you whether a sale actually funds your goals — and gives you time to improve the number. Turning proceeds into lasting income is the next step, covered in our transitions work.
Frequently asked questions
Less than the sale price. After capital-gains and ordinary income taxes, paying off any practice debt, and transaction fees — plus any part of the deal that’s deferred or contingent — your “cash in hand” is often meaningfully below the headline number. Estimating it before you sell is essential.
Start with the sale price, then subtract estimated taxes (which depend on how the price is allocated and the deal structure), payoff of any practice debt, and transaction fees, and separate out any earnout or equity rollover you won’t receive in cash today. The remainder is your real cash in hand. Model it with your CPA and advisor.
Sources
Founder & Financial Planner · Investment Adviser Representative · Series 63 & 65
Ian McGinnis is the founder of Dental Wealth Partners and a fee-only financial planner dedicated to dentists. As an investment adviser representative (Series 63 and 65), he built the firm to give dentists coordinated, fiduciary advice across their practice, taxes, investments, retirement plans, and long-term goals — the whole picture in one strategy. A graduate of Belhaven University, Ian previously worked at Davis Private Wealth, MML Investors Services, and Northwestern Mutual, and is based in the Jackson, Mississippi area. He is the author of The Wealthy Dentist and hosts the Smiles & Cents podcast.
Keep reading
- How is the sale of a dental practice taxed?A practice sale is taxed as a mix of capital gains and ordinary income, driven by how the price is allocated across assets. What dentists should plan for.
- Asset sale vs. stock sale: how should you structure a practice sale?Most dental practice sales are asset sales, but stock sales happen too. How the two differ for taxes, liability, and what it means for buyer and seller.
- How to value a dental practiceThe main methods used to value a dental practice, what drives value, and how buyers and sellers should think about the number.