How to Calculate After-Tax Proceeds from a Cash Takeover Offer

Selling in a Takeover? Use this simple shareholder calculator to estimate your after-tax cash

Facing a cash takeover like Titanium’s CAD$2.22-per-share offer? Your headline proceeds can look great — but the number you actually take home depends on cost basis, holding period, broker fees, withholding and local taxes. This guide gives a clear walkthrough, an on-page takeover calculator, and examples that show how to get from gross offer to after-tax proceeds.

Why this matters now (2026 context)

Late 2024 through early 2026 saw a steady wave of mid-market take-private deals and cross-border buyouts. Tax authorities increased compliance checks on liquidity events, and acquirers are using withholding and escrow mechanisms more often to manage seller risk. That makes modeling after-tax proceeds and settlement timing essential for every shareholder deciding whether to tender shares or hold out for negotiations.

Quick summary — the 60-second checklist

• Write down the offer price and number of shares.
• Determine your cost basis (what you paid, adjusted for splits and corporate actions).
• Estimate sale fees (broker commissions, exchange fees, taxes on trades).
• Know your holding period (long-term vs short-term may change tax rates).
• Identify applicable tax rules — Canada vs U.S., residency, and possible withholding.
• Plug values into the calculator below to see your estimated after-tax cash.

Takeover calculator (Estimate your after-tax cash)

Use this calculator as a planning tool. It simplifies local tax rules into an estimated combined tax rate or a Canadian inclusion rate — see the walkthrough below for details and examples.

How the calculator works — step-by-step walkthrough

Below we unpack each input with clear definitions and why it matters.

1) Offer price and shares

Gross proceeds = offer price × number of shares. This is the headline figure announced in a take-private deal (e.g., Titanium’s CAD$2.22). Don’t confuse the headline with the cash you will receive after fees and taxes.

2) Cost basis

Cost basis is what you paid for the shares, adjusted for splits, return of capital, or other corporate actions. Use your broker statements or trade confirmations to calculate per-share basis. If you acquired the shares over time, compute a weighted average basis.

3) Sale fees

Include broker commissions, exchange fees, and any third-party costs the buyer or your broker will deduct. For brokered deals the fee may be a flat amount or a per-share commission. Some deals also include a transfer fee or escrow administration fee.

4) Realized gain and taxable amount

Realized gain = gross proceeds − total cost basis − sale fees. That is the starting point for capital gains rules.

Jurisdictional differences:

• Canada: only a portion of capital gain is taxable (the inclusion rate — 50% in current practice). The taxable portion is added to your ordinary income and taxed at your marginal rate. See the Canada Revenue Agency resource for capital gains for more details.
• United States / other jurisdictions: long-term capital gains (assets held >12 months) are taxed at preferential rates; short-term gains are taxed at ordinary income rates. State taxes and surtaxes (e.g., NIIT in the U.S.) can raise the effective rate.

5) Withholding

In cross-border deals or when sellers are non-resident, the purchaser commonly withholds a portion of the proceeds and remits to tax authorities until the seller proves tax clearance. Withholding could be on gross proceeds or on the gain; the rules vary. For sales of Canadian shares by non-residents, buyers often require clearance certificates under section 116 of the Income Tax Act — failing that, withholding can be applied. Always confirm with a tax advisor and your broker.

6) After-tax cash

After-tax cash = gross proceeds − sale fees − tax due − any withholding not returned at closing. If withholding is refundable, you may get some back when you file your tax return — but that defers cash until tax season. Consider liquidity planning and tactical hedging if you need to protect proceeds between close and settlement.

Practical examples (walkthrough using Titanium’s CAD$2.22 offer)

Example 1 — Canadian resident investor

Scenario: 10,000 shares, offer = CAD$2.22, basis = CAD$1.00, fees = CAD$100, inclusion rate = 50%, combined marginal tax rate on taxable capital gain = 35%.

1. Gross proceeds = 2.22 × 10,000 = CAD$22,200
2. Total basis = 1.00 × 10,000 = CAD$10,000
3. Realized gain = 22,200 − 10,000 − 100 = CAD$12,100
4. Taxable amount (50% inclusion) = 12,100 × 50% = CAD$6,050
5. Estimated tax = 6,050 × 35% = CAD$2,117.50
6. Estimated after-tax cash = 22,200 − 100 − 2,117.50 = CAD$19,982.50

Takeaway: from a headline CAD$22,200 gross you might expect about CAD$19,980 after tax and fees under these assumptions.

Example 2 — Non-resident seller with withholding

Same facts as Example 1 but the buyer withholds 25% of gross proceeds pending clearance (a simplified common scenario in cross-border deals).

1. Withholding = 22,200 × 25% = CAD$5,550 withheld at closing
2. Estimated tax (as above) = CAD$2,117.50. If your final tax liability is CAD$2,117.50, you would file to reclaim the excess withholding.
3. Cash received at close = 22,200 − 100 − 5,550 = CAD$16,550 (the withheld CAD$5,550 may be repaid later after clearance or filing)

Takeaway: withholding can materially reduce cash at close even if part of that withholding is ultimately refundable.

Example 3 — U.S. investor (use combined rate)

If you are a U.S. taxpayer receiving proceeds from a Canadian take-private, your U.S. tax treatment may depend on residency, treaty positions, and foreign tax credits. The calculator lets you input an estimated combined capital gains rate (federal + state + surtaxes). For a simple case where your combined rate is 20%, the tax on the gain (CAD$12,100) would be CAD$2,420 and after-tax cash would be CAD$19,679 after fees.

Advanced strategies and 2026 trends — how to protect more of your proceeds

In 2025–2026, tax planning around liquidity events emphasized:

• Pre-close tax planning: Getting a tax opinion or confirmation of withholding rules before a closing can speed clearance and reduce cash trapped in escrow — streamline pre-close flows and document exchange processes to avoid delays, similar to techniques used to reduce onboarding friction.
• Elective rollovers: In some deals, sellers can elect share-for-share rollovers to defer tax (common in corporate reorganizations). If a deal is all-cash, these options may not apply, but in structured deals they are worth exploring.
• Loss harvesting and netting: If you have capital losses available, timing recognition and pairing them with a gain from a takeover can reduce tax — check wash-sale rules and jurisdictional constraints. Tactical hedging concepts can help here (see hedging strategies).
• International coordination: Cross-border sellers should secure clearance certificates (Canada’s Section 116 process) and confirm treaty relief where applicable to avoid excessive withholding. In 2025, more buyers insisted on pre-closing tax clearance as standard practice.
• Escrows and indemnities: Buyers frequently hold back a portion of proceeds in escrow for indemnity claims. Negotiate the escrow amount and duration; these holdbacks are illiquid cash constraints and should be modelled in your after-tax estimate — consider settlement timing and new settlement rails documented in layer-2 and live settlement discussions (layer-2 settlements and safety).

Checklist before you accept the offer

1. Gather your trade confirmations and broker statements to compute accurate cost basis.
2. Confirm whether you are treated as a resident or non-resident for tax purposes in the deal jurisdiction — identity and residency checks can be decisive (see identity control notes).
3. Ask the buyer or your broker about withholding rules and whether a tax clearance (e.g., CRA T2062 / Section 116 clearance) is required.
4. Estimate sale fees and likely escrow/holdback amounts.
5. Run multiple scenarios with different tax rates and withholding amounts — use the calculator above or batch scenarios with scalable analytics tools (example architectures discussed in ClickHouse performance notes).
6. Consult a cross-border tax specialist if the deal involves foreign residency, treaties, or complicated rollover language.

Common pitfalls & red flags

• Assuming gross proceeds = cash at close. Withholding and escrow reduce immediate cash.
• Using an incorrect cost basis — failing to account for splits, DRIPs, or return of capital adjustments.
• Ignoring state/provincial taxes and surtaxes that can materially change the effective rate.
• Overlooking the effect of share-based compensation (RSUs, stock options) that have different tax treatments.
• Relying on a single scenario — always stress-test with conservative and optimistic assumptions.

Where to find authoritative guidance

• Canada — Capital gains and disposition rules: Government of Canada, CRA (search “capital gains” on Canada.ca or see CRA guidance on taxable Canadian property and clearance certificates).
• United States — IRS Topic No. 409 (Capital Gains and Losses) and related publications for sale reporting and net investment income tax considerations.

Final takeaways — a practical plan

1. Run the calculator with your true basis and expected fees. Don’t rely on headline numbers.
2. Model at least three scenarios: optimistic (low tax), baseline (expected tax) and conservative (higher withholding or escrow).
3. If you are non-resident or the deal is cross-border, prioritize early tax clearance to avoid large withholdings at close.
4. Get a written estimate or opinion from a tax pro for sizeable positions — a small fee now may save thousands in withheld or unexpected tax later.

Remember: This calculator is a planning tool and does not replace professional tax advice. Tax laws and interpretation evolve — in 2026 authorities remain active in reviewing liquidity events, so having documentation and a clear tax position is more important than ever.

Call to action

Ready to model your specific deal? Use the calculator above with your numbers, then download your results and share them with a tax advisor. If you want a personalized review, contact our tax planning team for a tailored after-tax proceeds analysis and help with cross-border withholding and clearance — get a quote today and protect more of your takeover proceeds.

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