Nebraska SMB Mergers & Acquisitions in 2026: A Complete Legal and Tax Guide for Owners, Buyers, and Sellers

By Tom Horgan, Managing Partner, Horgan Law LLC | Last updated: May 2026

Key Takeaways

• The market: Approximately 6 million U.S. small and medium-sized businesses will change ownership by 2035 (McKinsey, February 2026), representing up to $5 trillion in enterprise value. Baby boomers make up 59 percent of sellers (IBBA).
• The structure: Most Nebraska SMB deals are asset purchases (IRC § 1060, IRS Form 8594) or equity purchases (stock or LLC membership-interest sales). The choice carries different tax and liability consequences for buyer and seller.
• Nebraska law: The Nebraska Uniform Limited Liability Company Act (Neb. Rev. Stat. § 21-101 et seq.) governs LLC sales and mergers. The Nebraska Model Business Corporation Act (Neb. Rev. Stat. § 21-201 et seq.) governs corporate transactions, including appraisal rights confirmed in Streck, Inc. v. Ryan, 320 Neb. 638 (2026).
• The federal tax rules: IRC § 197 (15-year amortization of acquired goodwill), IRC §§ 338(h)(10) and 336(e) (asset-sale tax treatment for stock transactions), IRC § 1202 (QSBS exclusion, now $15M cap post-OBBBA), and IRC § 453 (installment sale treatment of seller notes) drive most M&A tax planning.
• The SBA rules: SBA Standard Operating Procedure 50 10 8 (effective June 1, 2025) tightened SBA 7(a) acquisition financing under 13 C.F.R. Part 120. Seller notes must be on full standby for the entire SBA loan term to count toward the buyer’s 10 percent equity injection.
• Antitrust: The 2026 Hart-Scott-Rodino size-of-transaction threshold is $133.9 million (effective February 17, 2026, 15 U.S.C. § 18a, 16 C.F.R. § 801 et seq.), well above the price of nearly every Nebraska SMB transaction.

A West Omaha contractor in his mid-sixties has spent thirty years building a $4 million revenue HVAC business. He has no children who want to take over, three key employees who could not afford to buy him out, and a buyer prospect from a private equity rollup that is offering a stock purchase at a multiple he does not understand. Three blocks away, an Elkhorn engineer who left a corporate job last year is trying to close on a sign manufacturing business with an SBA 7(a) loan, and his lender just told him the seller note he negotiated will not count toward his equity injection unless it is on full standby for ten years.

Both transactions are part of the largest wave of small business ownership transitions in American history. Both are governed by Nebraska entity statutes, the Internal Revenue Code, Treasury regulations, and federal lending rules that very few owners and buyers actually read before sitting down at the closing table. This guide explains what is happening in the Nebraska SMB M&A market in 2026, how state and federal law structure these deals, what the new SBA rules require, what protections sellers and buyers should negotiate, and where the avoidable mistakes show up.

What Is Happening in the Nebraska and U.S. SMB M&A Market in 2026?

Quick Answer: The U.S. small-business M&A market in 2026 is being driven by mass baby boomer retirement, with the McKinsey Institute for Economic Mobility projecting that approximately 6 million SMBs will face ownership transitions by 2035, representing up to $5 trillion in enterprise value. Buyer demand is strong, but pricing is bifurcated: prepared, profitable businesses command healthy multiples while founder-dependent or messy-books businesses struggle to attract bankable offers.

The supply side is demographics. Baby boomers own approximately 12 million U.S. businesses, and roughly 4.1 to 4.2 million Americans are turning 65 every year between 2024 and 2027. The International Business Brokers Association reports that boomers still make up 59 percent of sellers, and most are selling because they want to retire. SMBs make up 99 percent of all U.S. companies and employ roughly half of the U.S. workforce, which makes this transition a structural test of the economy, not merely a personal-finance issue for the owners involved.

The demand side is robust. BizBuySell’s 2025 data shows that 77 percent of buyers feel confident they can find a good deal, and Axial reported 3,320 new deals coming to market in a single recent quarter, the second-highest deal volume on record. Healthcare, business services, industrials, and technology are the most active sectors. Healthcare deal volumes were up approximately 75 percent year-on-year in Q1 2025; business services with tech-enabled components were up roughly 30 percent.

Pricing is bifurcated. Businesses with clean books, recurring revenue, margin discipline, and management depth still command healthy multiples. Founder-dependent businesses with deferred maintenance on their financial reporting are receiving heavy discounts or no offers at all. Earnouts tied to post-closing performance have become standard in sectors with forecasting risk, and seller financing has expanded to fill the gap left by tighter SBA underwriting. Approximately 60 percent of small business owners have no documented succession plan, and of those who do attempt to sell, only about 30 percent successfully close. The Nebraska businesses that prepare, and that retain competent counsel before the letter of intent is signed, are the ones that close.

Asset Sale or Equity Sale: Which Deal Structure Is Right Under the Internal Revenue Code?

Quick Answer: In an asset sale, the buyer purchases specified assets and assumes specified liabilities, takes a stepped-up tax basis in the acquired assets under IRC § 1060, and amortizes acquired goodwill over 15 years under IRC § 197. In an equity sale, the buyer purchases stock or LLC membership interests and takes the entity with all of its assets and liabilities. Buyers generally prefer asset deals for the tax basis step-up and liability isolation; sellers generally prefer equity deals for capital gains treatment and a cleaner walk-away.

Almost every SMB M&A transaction in Nebraska is structured as either an asset purchase or an equity purchase. For a corporation, an equity purchase is a stock sale. For an LLC, it is a membership-interest sale. The choice between asset and equity has serious tax, liability, and consent consequences, and the right answer is rarely the same for both sides.

The buyer’s case for an asset purchase

The buyer picks the assets it wants and the liabilities it is willing to assume, leaves the rest with the seller’s entity, and allocates the purchase price among the acquired assets under IRC § 1060 and Treasury Regulation § 1.1060-1 using the residual method. Both buyer and seller must file IRS Form 8594, Asset Acquisition Statement, with their federal income tax returns for the year of the sale. The buyer receives a stepped-up tax basis in tangible assets and amortizes acquired Section 197 intangibles, including goodwill, going-concern value, workforce in place, customer lists, and trade names, ratably over 15 years under IRC § 197 and Treasury Regulation § 1.197-2. That amortization is one of the most valuable tax attributes a buyer obtains in any SMB acquisition.

The seller’s case for an equity sale

The seller hands over the entity, all of its assets, and all of its liabilities (known and unknown) and walks away with consideration generally taxed at long-term capital gains rates under IRC § 1(h), plus the 3.8 percent net investment income tax under IRC § 1411 where applicable. C corporation sellers facing an asset sale at the entity level confront two layers of federal tax: corporate-level tax under IRC § 11 followed by shareholder-level tax on distribution. That double-tax problem is the single biggest reason C corporation owners want stock sales, not asset sales.

Hybrid elections: IRC §§ 338(h)(10) and 336(e)

Sophisticated transactions can resolve the asset-versus-stock tension using a joint election under IRC § 338(h)(10), governed by Treasury Regulation § 1.338(h)(10)-1, or a unilateral election under IRC § 336(e), governed by Treasury Regulation §§ 1.336-1 through 1.336-5. Both elections treat a stock sale as an asset sale for federal tax purposes, giving the buyer the basis step-up while preserving the cleaner consent profile of a stock sale. Eligibility is limited (generally to S corporation targets and corporate subsidiaries of consolidated groups), and the election must be made on a timely-filed return using IRS Form 8023 for Section 338(h)(10) elections.

Qualified Small Business Stock under IRC § 1202

Sellers of C corporation stock should evaluate the Qualified Small Business Stock exclusion under IRC § 1202 before signing an LOI. Under the One Big Beautiful Bill Act enacted July 4, 2025, the per-issuer exclusion cap was increased from $10 million to $15 million (indexed for inflation in tax years after 2026), and the aggregate gross asset threshold was increased from $50 million to $75 million for stock issued after July 4, 2025. The exclusion can eliminate up to 100 percent of federal capital gains tax on the sale of qualifying C corporation stock held for the required period, which is potentially the single most valuable tax benefit in the Internal Revenue Code for an exiting Nebraska business owner. The IRS has added Section 1202 regulations to its 2026 priority guidance list, so the planning landscape will continue to evolve.

The new SBA wrinkle

The Small Business Administration’s June 2025 SOP 50 10 8 has collapsed the asset-versus-stock analysis in one important respect. Partial change-of-ownership transactions must now be structured as stock or interest sales rather than asset sales. Sellers who used to roll a sliver of asset-sale equity into a NewCo to facilitate financing can no longer do so without converting the entire transaction to a stock or interest sale and personally guaranteeing the SBA loan for two years.

A note on tax structure. Tax structure is persuasive authority only at Horgan Law. The client’s CPA signs off on the final approach before the purchase agreement is signed. The federal tax citations in this guide are descriptive, not prescriptive, and every transaction requires a coordinated legal-and-tax analysis.

How Does Nebraska Law Govern Approval of a Small Business Sale?

Quick Answer: Nebraska LLC sales of all or substantially all assets require member consent under Neb. Rev. Stat. § 21-136, with the default consent threshold being unanimous unless the operating agreement provides otherwise. Nebraska corporate mergers require director adoption and shareholder approval under the Nebraska Model Business Corporation Act (Neb. Rev. Stat. § 21-2,166), and dissenting shareholders have appraisal rights under Neb. Rev. Stat. §§ 21-2,171 to 21-2,183 as recently expanded in Streck, Inc. v. Ryan, 320 Neb. 638 (2026).

Nebraska entity statutes set the framework for who must approve a sale, in what form, and what dissenters can do if they disagree. Owners and buyers who ignore the governing statute and the operating or shareholder agreement are the ones who end up litigating closing disputes in the District Court of Douglas County or the District Court of Sarpy County.

Nebraska LLC sales: Neb. Rev. Stat. § 21-101 et seq.

For Nebraska LLCs governed by the Nebraska Uniform Limited Liability Company Act, a sale, lease, exchange, or other disposition of all or substantially all of the company’s property outside the ordinary course of business requires the consent of the members. A merger, conversion, or domestication under Neb. Rev. Stat. §§ 21-170 to 21-184 likewise requires member consent. Neb. Rev. Stat. § 21-136 confirms that even in a manager-managed LLC, those extraordinary decisions are reserved to the members rather than to the managers. The default consent threshold under the act is unanimous unless the operating agreement provides otherwise, which is one of the reasons a well-drafted operating agreement is the most underrated piece of paper in any closely held Nebraska business.

Nebraska corporate sales and mergers: Neb. Rev. Stat. § 21-201 et seq.

For Nebraska corporations governed by the Nebraska Model Business Corporation Act, the directors must adopt the plan of merger or share exchange, the shareholders must approve it by the statutorily required vote, and the surviving entity must file articles of merger with the Nebraska Secretary of State pursuant to Neb. Rev. Stat. § 21-2,166. The articles of merger must recite either that the shareholders approved the transaction in the manner required by the act and the articles of incorporation, or that shareholder approval was not required.

Appraisal rights and Streck, Inc. v. Ryan

Dissenting shareholders have appraisal rights under Neb. Rev. Stat. §§ 21-2,171 to 21-2,183. These provisions allow a shareholder who disagrees with a merger, share exchange, or other corporate action triggering appraisal to demand fair value for their shares in cash. The Nebraska Supreme Court recently confirmed in Streck, Inc. v. Ryan, 320 Neb. 638 (2026), that the NMBCA expanded these rights compared to the prior Business Corporation Act, including by changing the terminology from “dissenter’s rights” to “appraisal rights” and by eliminating the requirement that a shareholder be entitled to vote on the action to have appraisal rights. The Streck court further held that articles of incorporation can grant appraisal rights to a class of shareholders, including nonvoting Class B shareholders, even where the statutory default would not extend appraisal to that class. Streck is the most important Nebraska M&A decision in years for closely held corporations with multiple share classes.

Organic documents always control where they exist

Operating agreements, shareholder agreements, buy-sell agreements, and voting agreements frequently impose drag-along rights, tag-along rights, rights of first refusal, and supermajority approval requirements that override the statutory defaults. The single most common mistake we see in Nebraska SMB transactions is a seller signing a letter of intent without first reading the operating agreement that governs the entity being sold.

How Did SBA SOP 50 10 8 Change Small Business Acquisitions in 2025 and 2026?

Quick Answer: Effective June 1, 2025, SBA Standard Operating Procedure 50 10 8 (issued under 13 C.F.R. Part 120) reinstated stricter underwriting for SBA 7(a) acquisition loans. Buyers must inject at least 10 percent of project cost; seller notes count for only half of that 10 percent and only if on full standby for the entire SBA loan term, typically 10 years. Sellers retaining any post-closing equity must personally guarantee the SBA loan for at least two years.

The SBA’s SOP 50 10 8, codified in regulation at 13 C.F.R. Part 120, materially tightened SBA 7(a) acquisition underwriting in response to a $397 million negative cash flow in the 7(a) program during fiscal year 2024. Buyers, sellers, and their counsel should treat the following as the new baseline for any Nebraska acquisition that contemplates SBA financing.

Equity injection and seller financing

The buyer must inject at least 10 percent of the project cost. A seller promissory note can count toward up to half of that 10 percent, meaning up to 5 percent of project cost, but only if the note is on full standby with no principal or interest payments for the entire SBA loan term, typically 10 years. This is a sharp tightening of the prior 24-month standby rule. Seller notes structured to provide actual cash flow to the seller can still be part of the financing stack, but they will not count toward equity injection and will be considered in the buyer’s debt service coverage ratio.

Ownership and personal guarantees

Every owner of an SBA borrower must now be a U.S. citizen, lawful permanent resident, or qualified U.S. national. Any seller who retains even one percent of post-closing equity must personally guarantee the SBA loan for at least two years. The 20 percent threshold that previously exempted minority investors from personal guarantees has been removed in partial-change transactions.

Loan structure and limits

Partial change-of-ownership transactions must now be structured as stock or interest sales, not asset sales. The maximum SBA 7(a) loan is $5 million. Collateral is now required on any SBA loan exceeding $50,000, versus the prior $500,000 threshold. Earnouts and contingent pricing are generally prohibited inside the 7(a)-financed transaction itself, although properly structured arrangements outside the acquisition can sometimes survive lender scrutiny.

Documentation flexibility

Lenders may now accept CPA-prepared or reviewed financial statements in lieu of tax returns in defined circumstances, which is a meaningful concession for sellers whose tax returns understate the true cash flow of the business.

Practical effect on Nebraska deals

Industry surveys show that 41 percent of brokers have reported transaction delays attributable to the new policies, and average time to close has lengthened by roughly 30 days. Deals that previously relied on creative seller-rollover structures are now pivoting to all-cash structures, conventional bank debt, mezzanine financing, search fund equity, and phantom equity arrangements that mimic rollover economics without triggering the SBA’s personal-guarantee rules.

What Federal Tax Code Sections Should Every Seller and Buyer Understand?

Quick Answer: Beyond IRC § 1060 (purchase price allocation), IRC § 197 (15-year amortization of intangibles), and IRC §§ 338(h)(10) and 336(e) (asset-sale elections), Nebraska SMB sellers and buyers should pay specific attention to IRC § 453 (installment method for seller notes), IRC § 1202 (QSBS exclusion), IRC § 1411 (3.8 percent net investment income tax), IRC § 7872 (imputed interest on below-market loans), and IRC § 409A (deferred compensation rules applicable to earnouts paid to former owner-employees).

IRC § 453: Installment sale treatment of seller notes

A seller who finances part of the purchase price with a promissory note can generally elect installment sale treatment under IRC § 453, recognizing gain pro rata as principal payments are received rather than all at once at closing. The installment method does not apply to dealer dispositions, inventory, recapture income under IRC §§ 1245 and 1250, or publicly traded property. Sellers planning a meaningful tax deferral should run the numbers with their CPA before negotiating the note terms.

IRC § 1411: Net investment income tax

The 3.8 percent net investment income tax under IRC § 1411 applies to the capital gain portion of most SMB sales for higher-income sellers, and it is frequently overlooked in pre-sale tax projections. A $3 million capital gain on a sale of stock generates approximately $114,000 in NIIT in addition to the federal capital gains tax.

IRC § 7872: Imputed interest on below-market loans

Seller notes bearing interest below the applicable federal rate (AFR) published monthly by the IRS can trigger imputed interest under IRC § 7872. Sellers offering “interest-free” financing as a deal sweetener are frequently surprised to learn that the IRS will recharacterize a portion of principal payments as interest income.

IRC § 409A: Earnouts and deferred compensation

Earnouts paid to a seller who continues to work for the buyer post-closing can be recharacterized as compensation rather than purchase price, particularly where the earnout is tied to the seller’s continued employment. IRC § 409A and its implementing regulations impose strict timing rules on deferred compensation, with a 20 percent additional tax on noncompliant arrangements. Earnout structures should be reviewed by tax counsel before signing.

What Other Federal Regulations and Statutes Apply to SMB M&A?

Quick Answer: Beyond the Internal Revenue Code, key federal authorities include the Hart-Scott-Rodino Antitrust Improvements Act (15 U.S.C. § 18a, with the 2026 size-of-transaction threshold at $133.9 million effective February 17, 2026), the WARN Act (29 U.S.C. §§ 2101-2109) for layoffs of 50 or more workers, and ERISA for benefit plan transfers. Most Nebraska SMB deals fall below the HSR threshold but still implicate WARN, ERISA, and securities-law considerations.

Antitrust: Hart-Scott-Rodino and the 2026 threshold

The Hart-Scott-Rodino Antitrust Improvements Act of 1976, codified at 15 U.S.C. § 18a (Section 7A of the Clayton Act) and implemented by regulations at 16 C.F.R. Parts 801 through 803, requires pre-merger notification to the Federal Trade Commission and the Department of Justice Antitrust Division for transactions exceeding the size-of-transaction threshold, with a mandatory waiting period before closing. The 2026 size-of-transaction threshold is $133.9 million effective February 17, 2026, up from $126.4 million in 2025. Nearly every Nebraska SMB transaction falls well below this threshold, which means HSR is rarely a closing condition for deals below $100 million, but counsel should confirm thresholds and exemptions on every transaction.

Workforce: WARN Act

The Worker Adjustment and Retraining Notification Act, codified at 29 U.S.C. §§ 2101 through 2109 and implemented at 20 C.F.R. Part 639, requires 60 days’ advance notice of plant closings and mass layoffs by employers with 100 or more employees. Asset purchasers should confirm whether the seller’s workforce reductions in advance of closing trigger WARN obligations, and stock purchasers should confirm that no WARN exposure transfers with the entity.

Benefits and ERISA

The Employee Retirement Income Security Act of 1974, codified at 29 U.S.C. § 1001 et seq., governs the transfer or termination of qualified retirement plans, health and welfare plans, and other employee benefit arrangements. Asset purchasers generally do not assume the seller’s plans; stock and membership-interest purchasers generally do. Either way, ERISA coordination is non-negotiable in any Nebraska SMB acquisition with a 401(k), pension, or self-funded health plan.

Securities regulation

The issuance of buyer stock or noncash consideration to selling shareholders implicates the Securities Act of 1933 and the Securities Exchange Act of 1934. Most SMB deals rely on the private placement exemption under Section 4(a)(2) and Regulation D, 17 C.F.R. § 230.500 et seq., but the exemption must be perfected through the proper notice filing on Form D within 15 days of the first sale. Nebraska blue-sky compliance under the Nebraska Securities Act, Neb. Rev. Stat. § 8-1101 et seq., is a separate analysis.

What Protections Should Sellers and Buyers Negotiate in the Purchase Agreement?

Quick Answer: Five contractual provisions deserve specific attention in every Nebraska SMB deal: representations and warranties (with knowledge and materiality qualifiers), indemnification (with caps, baskets, and survival periods), escrow and working capital adjustments, restrictive covenants (non-compete, non-solicit, NDA), and third-party consents. Each is a place where significant value is created or destroyed in negotiation.

Representations and warranties. The buyer wants broad, deep representations covering financial statements, taxes, intellectual property, employees, contracts, customers, regulatory compliance, environmental matters, undisclosed liabilities, and litigation. The seller wants those representations qualified by knowledge, by materiality, and by disclosure schedules. The fight over knowledge qualifiers, meaning who has “knowledge” and what knowledge is imputed to them, is rarely worth less than six figures over the long run.

Indemnification. The threshold issue is who indemnifies whom, for what, and up to what cap. Caps, baskets, deductibles, and survival periods should be calibrated to the transaction, not pulled from a form file. Fundamental representations covering authority, ownership, and capitalization should survive indefinitely or at least through the applicable statute of limitations. Operational representations typically survive 12 to 24 months. Tax representations survive through the applicable assessment period under IRC § 6501.

Escrow and holdbacks. A buyer-side escrow of 5 to 15 percent of the purchase price for 12 to 24 months gives the buyer a recourse fund without forcing it to sue the seller. A working capital adjustment, with a true-up at closing, prevents the seller from stripping cash and inflating accounts receivable in the weeks before closing.

Restrictive covenants. Non-competition, non-solicitation, and non-disclosure covenants are enforceable in Nebraska if reasonable in scope, geography, and duration, but Nebraska courts will not blue-pencil overbroad restrictions. The restrictions must be drafted precisely against the actual business being sold. Generic five-year, fifty-state non-competes are common mistakes that are also common reasons enforcement fails.

Third-party consents. Almost every SMB has a handful of contracts (landlord, key customer, key supplier, licensor, lender) that prohibit assignment without consent. The purchase agreement should identify required consents on a schedule, allocate the burden of obtaining them, and condition closing on the material consents being delivered. Successor liability under Nebraska common law, including the de facto merger and continuity-of-enterprise doctrines, is the silent killer in asset deals that fail to address consents and known liabilities at closing.

What Are the Most Common Deal-Killers in Nebraska SMB M&A?

Quick Answer: The five most common deal-killers in Nebraska SMB transactions are unclean financial statements that fail quality-of-earnings analysis, undisclosed customer or employee concentration risk, surprise environmental or licensing issues, a co-owner or spouse who refuses to consent at the last minute, and SBA financing falling out under the new SOP 50 10 8 rules.
In the firm’s experience handling transactions for Omaha, Elkhorn, Lincoln, Bellevue, and Papillion business owners, the transactions that fall apart generally do so for one of five reasons:

• Books that do not survive quality-of-earnings. Add-backs that cannot be substantiated, owner compensation that cannot be normalized, and missing GAAP adjustments.
• Customer or employee concentration risk. Discovered in diligence and not addressed through retention bonuses, key-customer reps, or purchase price adjustments.
• Late-stage environmental, licensing, or regulatory surprises. Surface too late to be priced into the deal.
• Missing co-owner or spousal consent. The seller’s spouse or co-owner refuses to sign at the last minute because no one negotiated consent in advance and the operating or shareholder agreement requires it.
• SBA financing falling out. Under SOP 50 10 8, the buyer cannot get to the 10 percent equity injection, the seller note structure fails standby rules, or rollover equity triggers personal guarantee requirements that one party will not accept.

All five are avoidable with disciplined deal preparation and counsel who reads the operating agreement, the customer contracts, the existing loan documents, and the lease before the LOI is signed.

Frequently Asked Questions: Nebraska SMB M&A

Do I need a Nebraska attorney to sell my Omaha business?

You are not legally required to use Nebraska counsel for a Nebraska transaction, but the deal will be governed substantially by Nebraska entity law, real estate law, employment law, and state tax law. Out-of-state counsel can often handle a Nebraska deal competently. Horgan Law LLC regularly serves as local Nebraska counsel for out-of-state attorneys on exactly these transactions.

How long does a typical Nebraska SMB M&A transaction take?

A straightforward deal with a prepared seller, a financed buyer, and clean books typically closes in 90 to 120 days from signed LOI. The SBA SOP 50 10 8 changes have added roughly 30 days to the average timeline. Deals with significant diligence issues, third-party consents, regulatory approvals, or real estate components can take six months or more.

What is the typical purchase price multiple for a Nebraska SMB?

Pricing varies by industry, recurring revenue mix, and management depth. Service businesses typically transact at 2.5x to 4x seller’s discretionary earnings. Tech-enabled and recurring-revenue businesses can transact at 4x to 7x EBITDA or higher. Founder-dependent businesses without a management team trade at the lower end of those ranges and frequently fail to attract bankable offers at all.

Should I sign a letter of intent before getting an attorney involved?

No. The letter of intent sets the structural framework for the entire transaction, often including exclusivity, deal structure, price mechanics, escrow expectations, and key economic terms that become very difficult to renegotiate later. Horgan Law reviews LOIs before signature, not after.

What happens if a minority owner refuses to consent to a sale?

The answer depends on the entity’s organic documents and the applicable statute. For a Nebraska LLC, the operating agreement controls, and absent agreement, the consent thresholds in the Nebraska Uniform Limited Liability Company Act apply. For a Nebraska corporation, the NMBCA shareholder voting rules govern, and a dissenting shareholder may have appraisal rights under Neb. Rev. Stat. §§ 21-2,171 to 21-2,183, as recently confirmed and expanded by Streck, Inc. v. Ryan, 320 Neb. 638 (2026).

Can I exclude my entire gain from federal tax under IRC § 1202?

Possibly. IRC § 1202 allows certain sellers of qualified small business stock to exclude up to 100 percent of federal capital gains tax, capped at $15 million per issuer for stock acquired after July 4, 2025 (or $10 million for stock acquired on or before that date). The corporation must be a domestic C corporation with aggregate gross assets at or below $75 million (post-OBBBA) at the time of stock issuance, the stock generally must be held for five years, and the corporation must satisfy active business requirements. Pre-sale planning is essential because the exclusion does not apply retroactively to non-qualifying stock.

Will my seller note count toward the buyer’s SBA equity injection?

Only if the note is on full standby (no principal or interest payments) for the entire SBA loan term, typically 10 years, and only up to 50 percent of the required 10 percent equity injection. A seller note that pays current interest, or that has a shorter standby period, can still be part of the financing stack but will not count toward equity injection under SOP 50 10 8.

Do I need an HSR filing for my Nebraska business sale?

Almost certainly not. The 2026 Hart-Scott-Rodino size-of-transaction threshold is $133.9 million, effective February 17, 2026. Virtually every Nebraska SMB transaction is below that threshold. Counsel should confirm thresholds and exemptions on every transaction, but HSR is rarely a closing condition for deals below approximately $100 million.

How are earnouts taxed?

Earnouts are typically treated as deferred purchase price taxable at capital gains rates if structured as additional consideration to the selling shareholders. However, the IRS will recharacterize earnouts as ordinary compensation income (subject to payroll tax) where the earnout is tied to continued employment of the seller. IRC § 409A imposes strict timing rules on deferred compensation arrangements. Earnout structures should be drafted with both tax counsel and corporate counsel before signing.

What is the difference between an asset purchase and a stock purchase under Nebraska law?

In an asset purchase, the buyer purchases specified assets (equipment, inventory, intellectual property, customer relationships) and assumes only specified liabilities, with the seller’s entity retaining the rest. In a stock or LLC membership-interest purchase, the buyer acquires the equity of the entity itself and steps into all of its assets and liabilities (known and unknown). Asset deals generally favor buyers (tax basis step-up under IRC § 1060 and IRC § 197, liability isolation); equity deals generally favor sellers (capital gains treatment, cleaner walk-away, easier handling of non-assignable contracts).

Working With Horgan Law on a Nebraska SMB M&A Transaction

If you are considering selling a Nebraska business, evaluating an acquisition, structuring an SBA-financed deal under the new SOP 50 10 8 rules, planning around IRC § 1202 or IRC §§ 338(h)(10) and 336(e) elections, or working through a partial buyout or succession plan, Horgan Law LLC can help. The firm handles transactions for owners, buyers, private equity sponsors, family offices, and search funds across Omaha, Elkhorn, Lincoln, Bellevue, Papillion, Gretna, and the surrounding region. Contact us at 402-965-0652 or visit horganlawfirm.com/contact-us to schedule a consultation.

About the Author

Tom Horgan is the Managing Partner and founder of Horgan Law LLC in Omaha, Nebraska. His practice spans commercial litigation, corporate and M&A, contracts, real estate, estate planning, and insurance defense. He represents Nebraska business owners, buyers, and investors in middle-market transactions across the state. Horgan Law LLC is a Super Lawyers-recognized firm serving Omaha, Elkhorn, Lincoln, Bellevue, Papillion, Gretna, and the broader Midwest.

Key Authorities Cited

Nebraska Statutory Authorities

• Neb. Rev. Stat. § 21-101 et seq. (Nebraska Uniform Limited Liability Company Act)
• Neb. Rev. Stat. § 21-136 (manager-managed LLC; member consent for extraordinary transactions)
• Neb. Rev. Stat. §§ 21-170 to 21-184 (LLC merger, conversion, and domestication)
• Neb. Rev. Stat. § 21-201 et seq. (Nebraska Model Business Corporation Act)
• Neb. Rev. Stat. § 21-2,166 (articles of merger or share exchange)
• Neb. Rev. Stat. §§ 21-2,171 to 21-2,183 (appraisal rights)
• Neb. Rev. Stat. § 8-1101 et seq. (Nebraska Securities Act)

Nebraska Case Authority

• Streck, Inc. v. Ryan, 320 Neb. 638 (2026) (NMBCA appraisal rights; Class B nonvoting shareholders)

Internal Revenue Code Provisions

• IRC § 1(h) (long-term capital gains rates)
• IRC § 11 (corporate income tax)
• IRC § 197 (15-year amortization of acquired intangibles, including goodwill)
• IRC § 338(h)(10) (joint election to treat stock sale as asset sale)
• IRC § 336(e) (unilateral election to treat stock sale as asset sale)
• IRC § 368(a) (tax-free reorganizations)
• IRC § 409A (deferred compensation; earnouts)
• IRC § 453 (installment method for seller financing)
• IRC § 1060 (allocation of purchase price in asset acquisitions)
• IRC § 1202 (Qualified Small Business Stock exclusion; OBBBA amendments effective July 5, 2025)
• IRC § 1411 (3.8% net investment income tax)
• IRC § 6501 (statute of limitations on tax assessments)
• IRC § 7872 (imputed interest on below-market loans)
• IRC §§ 1245 and 1250 (depreciation recapture)

Treasury Regulations

• Treas. Reg. § 1.197-2 (amortization of Section 197 intangibles)
• Treas. Reg. § 1.338(h)(10)-1 (Section 338(h)(10) election procedures)
• Treas. Reg. §§ 1.336-1 through 1.336-5 (Section 336(e) election procedures)
• Treas. Reg. § 1.1060-1 (allocation of consideration in asset acquisitions)

IRS Forms

• IRS Form 8023 (Section 338(h)(10) election)
• IRS Form 8594 (Asset Acquisition Statement Under Section 1060)

Federal Statutes and Regulations

• 15 U.S.C. § 18a (Hart-Scott-Rodino / Clayton Act § 7A)
• 16 C.F.R. Parts 801-803 (HSR implementing regulations)
• 17 C.F.R. § 230.500 et seq. (Regulation D private placement exemption)
• 20 C.F.R. Part 639 (WARN Act regulations)
• 13 C.F.R. Part 120 (SBA 7(a) Loan Program)
• 13 C.F.R. Part 121 (SBA small business size standards)
• 29 U.S.C. §§ 1001 et seq. (ERISA)
• 29 U.S.C. §§ 2101-2109 (WARN Act)
• Securities Act of 1933, 15 U.S.C. § 77a et seq.
• Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.
• SBA Standard Operating Procedure 50 10 8 (effective June 1, 2025)

Legislative Authority

• One Big Beautiful Bill Act, Pub. L. No. 119-XX (enacted July 4, 2025) (amending IRC § 1202)

Market Data Sources

• McKinsey Institute for Economic Mobility, “The Great Ownership Transfer: A New Era of Business Stewardship” (February 2026)
• International Business Brokers Association (IBBA), 2025 Market Pulse Report
• BizBuySell, 2025 Insight Report
• Axial, 2025 Quarterly Deal Volume Data
• Federal Trade Commission, 2026 HSR Threshold Announcement (January 14, 2026)