Selling Your Medical Practice Without the Year-One Tax Bomb

For specialty practices (cardiology, GI, orthopedics, oncology), multiples run higher (6-12x EBITDA). A $2M EBITDA specialty practice = $12M-$24M.

The math — $5M medical practice sale

Assumes $5M sale, 70% goodwill, 20% equipment, 10% supplies + AR.

Medical-practice tax wrinkles

1. MSO / Friendly PC structure — most physician roll-ups use MSO-MSO with management services agreement. APA papers the §453. State medical board ownership rules don't affect §453 mechanic.
2. Equipment §1245 recapture — EMR systems, imaging equipment (CT, MRI, X-ray), surgical instruments, exam tables — high recapture exposure year one. Allocate carefully.
3. Specialty vs primary care — specialty (cardiology, GI, orthopedics) higher multiples and higher goodwill % than primary care. Better §453 leverage.
4. Concierge / DPC (direct primary care) model — different valuation methodology, often higher goodwill % due to recurring membership fees.
5. Insurance contracts and Medicare provider number transfer. Affects timing not §453 mechanic.
6. Stark Law / Anti-Kickback Statute compliance — sale must comply. Buyer's counsel handles.
7. Receivables collection post-close — typically allocated to seller; treatment matters.
8. State medical board notice requirements — vary by state.

When this fits

• $1.5M+ practice value
• Goodwill-heavy deal (most MSO deals qualify)
• Sophisticated buyer with M&A counsel (PE-backed platforms have all done §453 before)
• Physician retiring or scaling back (not 100% rollover)

When it doesn't

• Mostly equipment sale
• Solo without team
• 100% rollover into MSO equity

How I work

Hans Goldstein, IRC §453 specialist. Pacific Life / Independent Life / USAA Life and other A-rated Fortune 500 carriers — 50 states. Free 15-min fit-check call. Bring practice EBITDA, equipment basis, prior depreciation, offer terms, residency state.

Frequently asked

Q: My MSO offer is 60% cash / 40% rollover. Does §453 work? A: Yes — on the cash portion. The rollover equity has its own §351-like deferral mechanic. Two layered deferrals.

Q: I'm a primary care doc with ~$400K EBITDA. Too small? A: Maybe — if you can stretch the sale price to $1.5M+ with optional carve-outs (real estate, ancillary services), §453 fits. Below that the math doesn't move the needle.

Q: Optum / Privia — do they paper §453? A: Yes, routinely. Their M&A counsel knows the structure.

Find out what your practice sale tax bill actually is — and what you can do about it

No retainer. The carrier compensates the broker — not you.

Find out what your tax bill actually looks like before you sell — including the parts your CPA may not raise until the return is already being prepared.

Most people find out what they owe after the sale closes, when nothing can be changed. A short conversation now tells you the number, which layers apply to your situation, and which options are still open while the sale is still in front of you.

• What you will actually owe — federal, the 3.8% surtax, recapture and your state
• Which of those layers you can still do something about
• Whether spreading the sale changes the number in your case

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What are you selling? (and roughly what you paid)

Approx. sale $$—Under $500K$500K – $1M$1M – $3M$3M – $10M$10M+

When are you selling?—Within 30 days60–90 days3–6 months6–12 monthsAlready soldJust exploring

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Walk me through my options

Hans Goldstein · 615-808-9731 · Goldstein & Co. LLC · This is an educational conversation, not tax advice. Bring your CPA in before you file.

Educational. Not tax or legal advice.