How are gains from a business sale taxed?

Always good to know

I would agree that the topic gets complicated - but in my experience, conceptual thoughts follow. LLC's with more than one member are taxed by default as a partnerships. The transaction most likely will be an asset sale. Gain / loss is recognized by comparing allocated sales value of an asset to its corresponding tax basis. The FMV of NWC, with rare exception, is the balance sheet carrying value (read: tax basis for an accrual basis taxpayer) and thus no gain as Mike Adhikari noted. From there sales value is allocated to prop & eq. but other than delivery vehicles and is some cases, machinery that is newer or more sophisticated (i.e. CNC controls) - the FMV of the prop & eq on a GAAP balance sheet is a moderate amount (save for a notably capital intensive business). Often the FMV here is near in magnitude to the balance sheet carrying value. Any gain here represents depreciation recapture and is taxed at ordinary rates. From there, the remaining sales value is assigned to the sale of goodwill which is taxed at cap gain rates. All-in, if structured correctly (and legitimately), the bulk of the gain is taxed at capital gains tax rates from a tax perspective - this is particularly true if the gain is significant (say an exit at 6X or beyond << a guess).