A CPA practice in 2026 sells for about one times gross fees. The sold-deal median on BizBuySell for 2021 through 2025 is 1.02x revenue and 2.04x seller’s discretionary earnings; broker guides put practices under $500,000 at 0.7x to 0.9x and practices between $500,000 and $2 million at 0.9x to 1.2x. The price is rarely paid in one piece. Offers commonly put 50% to 80% of the price in cash at closing and tie the rest to how many clients are still paying fees one or two seasons later; sales between individual CPAs can run as low as 20% to 40% at closing with a five-to-seven-year payout. From first conversation to closing takes three to nine months depending on the buyer, and in California two rules set the calendar: a written nondisclosure agreement before any client information leaves your office, and a client notice with a 90-day objection window before any file moves to the buyer.
I am a practicing CPA in Los Angeles and the founding CPA of Wilshire Intelligence Network, which buys established CPA and tax practices across California. I sit on the buyer’s side of these conversations, so read what follows with that in mind. The numbers below come from published sold-deal data, broker guides, the IRS, the Franchise Tax Board, and the California Board of Accountancy, each one dated and linked at the end.
- 01Sold-deal median 1.02x gross and 2.04x SDE (BizBuySell, 2021 to 2025). Broker guides: 0.7x to 0.9x under $500,000, 0.9x to 1.2x from $500,000 to $2 million, 1.1x to 1.3x for well-structured firms.
- 02Typical terms: 50% to 80% cash at closing, the balance paid over one to two years and adjusted to client retention; individual-to-individual sales as low as 20% to 40% at closing. An all-cash price is lower than a retention-adjusted one for the same practice.
- 03Four buyer types: an individual CPA, a local firm, a platform or consolidator, and a capital-backed buyer such as WIN. They price the same practice differently and pay on different calendars.
- 04Tax: goodwill is long-term capital gain federally (0%, 15%, 20%) and ordinary income in California (9.3% to 12.3%, plus 1% over $1 million). A $1,000,000 cash sale nets a married couple about $722,000.
- 05California: NDA before any client data (BPC 5063.3), written client notice with a 90-day objection window before any file transfers (16 CCR 54.3), and a non-compete that holds only because goodwill is being sold (BPC 16601).
What a CPA practice sells for in 2026
Three published sources agree on the center and disagree on the edges. BizBuySell’s sold-deal data for accounting and tax practices, 2021 through 2025, puts the median price at 1.02x revenue, with the middle half of deals between 0.92x and 1.17x. The same deals show a median of 2.04x seller’s discretionary earnings, and the 2025 average crept up to 1.11x revenue. Accounting Practice Sales, the largest broker in the niche, has been telling sellers for years that one times gross is a rule of thumb and that 80% to 120% of gross is the realistic range. CT Acquisitions, a buy-side intermediary, updated its guide on October 12, 2026: 0.7x to 0.9x for practices under $500,000 in revenue, 0.9x to 1.2x from $500,000 to $2 million, with compression below 0.8x when the seller is the lead reviewer on every return or the top clients exceed 25% of fees. Poe Group Advisors puts well-structured firms at 1.1x to 1.3x and calls 1.4x rare.
Asking prices run higher. On September 23, 2026, the first page of Accounting Practice Sales’ California listings carried eighteen practices with gross fees from $144,000 to $1,494,166. The asking multiples ran from 1.01x to 1.51x, median 1.24x. Asking is not selling. Nationally, listings sit around 1.15x and completed sales around 1.02x, and I see no reason California closes that gap.
Four things move a practice inside the range, and buyers check all four before they talk about terms.
| Factor | Moves the multiple up | Moves it down |
|---|---|---|
| Service mix | Monthly bookkeeping, payroll, client accounting, outsourced CFO. Buyers price this revenue at 1.5 to 2 times the multiple of seasonal tax preparation because it renews without a decision by the client. | One-off projects. Fifty percent or more of fees landing between January and April. |
| Owner dependence | Staff prepare and a second person reviews. Clients know the preparer by name. | The owner reviews every return and holds every relationship. Buyers assume the practice walks out with you. |
| Concentration | No client over 5% of fees. | Top ten clients above 25% of fees. One client above 10%. |
| Your role after closing | You stay one or two seasons and introduce the successor client by client. | You leave at closing. Expected retention drops and the buyer prices the drop. |
A quick range for your own practice
Three inputs give a range at the published multiples. The practice valuation calculator prices each service line separately and adjusts for retention; this is the short version.
1.05x to 1.35x gross
A range for the practice, before cash, notes and holdbacks are set. The full calculator prices each service line; the three-minute quiz ends with a written valuation from our team.
Mix ranges: tax 0.95x to 1.20x, mixed 1.05x to 1.30x, monthly work 1.20x to 1.55x. Under $500,000 subtracts 0.10x from both ends; $2 million and over adds 0.10x to the top. Retention index: step back 0.91, one season 1.04, two or more 1.13; an index above 1.00 raises only the top, below 1.00 it lowers both ends. Concentration 20% to 40% subtracts 0.03, over 40% subtracts 0.07. Result held between 0.8x and 1.8x. An estimate, not an appraisal or an offer.
Who buys CPA practices, and how each one pays
The same practice draws four kinds of offer. The headline multiple is only the first line of each.
| Buyer | Typical target | How the price is paid | What it means for you |
|---|---|---|---|
| Individual CPA, usually through a broker | Under $1 million to $2 million in fees | Published guides describe 20% to 80% in cash at closing, the balance paid over two to seven years and adjusted to retention. Often an SBA loan, so the closing waits on a bank. | Broker commission comes out of your proceeds. The transition depends on one person’s capacity and financing. |
| Local or regional firm | $500,000 to $5 million | Cash plus a retention payout, sometimes a merger with a partnership interest instead of cash. | Your office usually consolidates into theirs. Staff with overlapping roles are at risk. |
| Platform or consolidator, often PE-backed | $3 million and up, priced on EBITDA at 4x to 7x | Cash, an earnout over two to three years, and rollover equity of 20% to 40% in the platform. | The firm is rebranded on the platform’s schedule. Partner compensation is reset. Most practices under $3 million do not qualify. |
| Capital-backed buyer with a CPA successor (WIN) | Established practices across California | Equity capital committed before the offer, no financing contingency, cash at closing, a retention-linked holdback or seller note where the deal calls for it, optional rollover. | No commission. A practicing CPA becomes the owner-operator; the name, office and staff stay. About twelve weeks from first call to closing. |
Individual-buyer terms are as described in the CT Acquisitions and Accounting Practice Sales guides. Platform figures are CT Acquisitions, October 2026. WIN terms are from our practice owners page.
How the price is paid: cash, holdbacks, notes and earnouts
Every offer is a headline number and a payment schedule, and the schedule decides what you keep. Four instruments appear in almost every CPA practice deal.
- Cash at closing. The only part of the price that does not depend on what happens next. Individual buyers tend to pay less of it; capital-backed buyers more.
- Retention holdback or look-back. Part of the price is held and paid after one or two seasons, scaled to the fees the transferred clients actually paid. Some deals reprice the whole amount on the look-back; some hold back only the deferred part. Ask which one you are being offered, and ask that clients who object under the California notice rule and leave before the transfer are excluded from the retention base.
- Seller note. You finance part of the price at a stated interest rate over three to five years. The interest is ordinary income to you, and the principal is reported under the installment method. Secure it against the practice assets and the buyer’s personal guarantee.
- Earnout. Payments that depend on revenue or profit targets after closing. Common in platform deals, less so in sales to individuals. The definitions of revenue and profit in the purchase agreement matter more than the percentages.
Work an example. A practice with $1,000,000 in gross fees receives two offers. The first is 1.1x, $1,100,000, with 70% at closing and the remaining 30% paid after 24 months on a look-back that reprices the whole deal on retained fees. The second is 1.0x, $1,000,000, all cash. If 85% of fees are retained, the first offer pays $770,000 at closing and $165,000 at month 24, which is 1.1x times $850,000 less the cash already paid, for $935,000 in total. The second pays $1,000,000 on closing day. If retention comes in at 95%, the first offer pays $1,045,000. The difference between the two is a bet on retention, and the seller who stays through a season is the one who should take it. The after-tax proceeds calculator runs any structure year by year, after federal and California tax.
The eight steps, from first conversation to closing
- Decide what you are selling and when you want to leave
The whole practice or part of it, with you staying two seasons or stepping back at closing. Buyers price the answer, so settle it before the first call.
Month 0 - Get the numbers in order
Three years of fee history by service line, a client list with tenure and fees per client, staff roster with compensation, and a normalized income statement. The practice earnings calculator turns net income into SDE and EBITDA the way a buyer will.
Months 0 to 2 - Fix what buyers will find
Engagement letters for every client, a second reviewer on returns, billing moved to the current fee schedule, and the top-client concentration brought down if it exceeds 25%. The sale readiness check scores the twelve items buyers raise most.
Months 2 to 12, or longer - Choose the buyer type, then the buyer
A broker listing, direct conversations with local firms, or a capital-backed buyer. The right choice depends on the size of the practice and the role you want afterwards. Sign a written NDA before any client information moves (BPC 5063.3).
Month 1 of the process - Indication of value, then a written offer
A buyer who has your fee history and client profile can give a range in days. The written offer states price, cash at closing, holdback mechanics, note terms, your role, and the timeline. With WIN this is a letter of intent with funding confirmed and proof of funds available to your broker.
Weeks 2 to 4 - Diligence
The buyer confirms fees against bank deposits, reads the engagement letters, checks the top clients, reviews the lease and staff agreements, and looks at the software stack. A finite request list keeps your office routine undisturbed.
Weeks 5 to 8 - Purchase agreement and the client notice
Asset purchase agreement with the allocation, the covenant, the transition terms and the retention mechanics. In California, the client notice under 16 CCR 54.3 goes out after signing and starts the 90-day clock before any file can move.
Weeks 8 to 10 - Closing and transition
Cash at closing, then the introductions client by client and the staff conversation. The transition runs on the schedule the purchase agreement sets, and a seller who stays through the first season keeps more of the holdback.
Weeks 10 to 12, then one or two seasons
The time from a signed offer to closing is nine to twelve weeks with a funded buyer and four to six months with an SBA-financed one. The preparation before the first call is where the calendar stretches, and where most of the value is added or lost.
The California rules that set the calendar
Three rules apply to every practice sale in the state, and two of them decide when the files can move.
| Rule | Source | What it requires |
|---|---|---|
| Written NDA before any client information reaches a buyer | BPC 5063.3(a)(4) | Confidential client information may be disclosed in connection with a proposed sale or merger only if the parties sign a written nondisclosure agreement covering all client information shared. A teaser with client counts is fine; a spreadsheet with names is not. |
| Written client notice with a 90-day objection window | 16 CCR 54.3, operative April 1, 2024 | Mail (or, with the client’s prior written consent, email) every client subject to the sale, asking consent to transfer their records and stating that consent is presumed if they do not object within 90 days. No records move until the client consents or the 90 days pass. Keep the notices and responses for four years. Clients who object get their records back without delay. |
| Non-compete tied to the sale of goodwill | BPC 16601 | California voids most non-competes, but a person who sells the goodwill of a business may agree not to carry on a similar business in the area where it operated, for as long as the buyer carries it on there. The covenant holds because goodwill is in the deal. |
The 90-day notice is the one that changes the calendar. A notice mailed October 1 clears the objection window on December 30, which is why California closings that want the files transferred before the filing season are signed in September and mailed in early October. A deal signed in November leaves the buyer unable to open most files until February. If the transfer is timed to a holdback measured on the first season’s collections, the notice date and the holdback period need to be drafted together.
The federal layer sits on top. Treasury Regulation 301.7216-2(n) lets a tax return preparer’s client list move with the sale of the business, and lets a prospective buyer review it in diligence under a written agreement that keeps the information confidential and bars any use other than evaluating the purchase. The buyer takes the list subject to the same rules. One NDA drafted to satisfy both BPC 5063.3 and 7216 is the normal practice.
Two smaller items. An accountancy corporation reports a change in shareholders, name or address to the Board within 30 days under 16 CCR 75.11. And if you intend to stop practicing, the Board’s retired status under BPC 5070.1 is available after the sale for a $75 fee; retired status permits receiving a share of profits or other compensation from a public accounting firm, which matters if your deal includes a retention payout or a consulting agreement.
How the sale is taxed
Almost every CPA practice sale is an asset sale, and the price is allocated among asset classes under IRC 1060 on Form 8594, filed by both sides. The allocation decides the tax.
| Item | Federal | California |
|---|---|---|
| Goodwill and client list | Long-term capital gain if held over a year: 0%, 15% or 20% | Ordinary income: 9.3% across most of the range, then 10.3%, 11.3% and 12.3%, plus 1% on taxable income over $1,000,000 |
| 2026 federal breakpoints | 15% from $49,450 to $545,500 single, $98,900 to $613,700 joint; 20% above (Rev. Proc. 2025-32) | 2025 schedule: 9.3% from $72,725 to $371,479 single, double for joint filers; 12.3% above $742,953 single (FTB); the 2026 schedule is published in the fall |
| Non-compete covenant | Ordinary income, up to 37% | Ordinary income |
| Furniture and equipment | Ordinary income to the extent of prior depreciation | Same |
| 3.8% net investment income tax | Not on the goodwill gain of an owner who materially participates (Reg. 1.1411-4(d)(4)(i)(A)); interest on a seller note is not excluded | No state equivalent |
| Seller note or earnout | Installment method, IRC 453 and Publication 537; gain recognized as payments arrive | Conforms; reported on Form FTB 3805E |
The buyer amortizes goodwill and the covenant over fifteen years under IRC 197 either way, so the buyer is indifferent to how much of the price lands on the covenant. You are not. Every dollar allocated to the non-compete is taxed as ordinary income at up to 37% federally plus the California rate, while goodwill is capital gain federally. Keep the covenant allocation small and defensible and let BPC 16601 do the legal work.
A worked case from our after-tax proceeds calculator: a married couple sells for $1,000,000 in cash with $150,000 of other taxable income in the year. Federal tax on the goodwill gain is $176,815, at 15% and 20%. California adds $101,155, of which $1,500 is the 1% on the slice over $1,000,000. Total tax $277,970, net $722,030, an effective rate of 27.8%. A seller note spreads the federal gain over the years the payments arrive, which can hold more of it inside the 15% bracket.
One trap for owners who plan to retire out of state. Under FTB Publication 1100, section C, installment gain from intangible property sold while you were a California resident stays California-source after you move; Example 8 taxes a former resident on exactly that. Goodwill of a sole proprietorship is an intangible. Only the interest on the note follows you. If moving is part of the plan, the sequence needs a California tax adviser before the purchase agreement is signed.
Staff and clients
Buyers price retention, and retention is mostly about two conversations you control.
On average, 75% to 80% of clients stay after a practice sale; with a transition plan, 90% or more stay. The plan is simple. The notice letter under 16 CCR 54.3 goes out in your name, on your letterhead, and says why you chose this buyer and that you will be in the office through the coming season. Then you introduce the successor to the top fifty clients personally, in person for the ones who matter most. A seller who steps back at closing can expect retention near the bottom of the range, and the holdback will show it.
Staff hear about the sale after signing and before the client letters go out, from you, with the buyer in the room. In Los Angeles and the Bay Area, buyers price staff retention harder than in most states because replacing a senior preparer costs more here: Robert Half’s 2026 guide puts a Los Angeles tax manager at $144,100 to $193,225. A retention bonus that pays after the first season is the usual answer for the one or two people the practice cannot run without. If the sale changes the employer of record, California Labor Code 201 and 227.3 require final wages and vested vacation to be paid at discharge, so the staff agreements and the payroll handoff belong in the purchase agreement, not after it. Under the 90-day notice rule the staff will also be logging the returned notices and objections, so the person who runs that process needs to be one of the people staying.
The mistakes I see most
- Mailing the client notices after closing. Files cannot move for 90 days after the notice date regardless of what the purchase agreement says. Signed in December and mailed in January means the buyer opens most files in April.
- Sending the client list before the NDA. BPC 5063.3 requires a written nondisclosure agreement covering all client information before disclosure to a prospective buyer.
- Comparing the headline multiples and not the schedules. A 1.3x offer with 40% at closing and a five-year payout can pay less than a 1.0x offer in cash. Lay the two schedules side by side at 75%, 85% and 95% retention before you choose.
- Letting the covenant carry the price. Every dollar on the non-compete is ordinary income. Keep it modest.
- Deciding to move out of state after the structure is set. Installment gain on goodwill stays California-source. The residency decision comes first.
- Leaving at closing. The buyer prices your departure, and so does the holdback. One season of introductions is the highest-paid work most sellers ever do.
- Waiting until the practice is in decline. Buyers pay for the last three years of fee history. The best year to sell is one in which fees are flat or rising and you still have the energy for a season of transition.
What a sale to WIN looks like
Wilshire Intelligence Network buys established CPA and tax practices across California and pairs each one with a practicing CPA who becomes its owner. The equity capital is committed before we make an offer, so there is no SBA loan and no financing contingency; proof of funds is available to your broker at the letter of intent. The process is five steps and about twelve weeks: an introductory call, an indication of value from high-level figures, a written offer, a finite diligence list, then closing and a transition on your schedule. Terms follow the deal: cash at closing, a retention-linked holdback or a seller note where the deal calls for one, and optional rollover equity. There is no commission, the practice is never listed or shopped around, and your clients and staff hear about the sale from you, when you decide. The firm keeps its name, its office and its people. You stay two or three seasons at meaningful compensation and introduce your successor client by client, or step back sooner.
The first step is one call with our CPA team. We send a written valuation, with terms, within 24 hours of it, and the call commits you to nothing.
Sources
- BizBuySell, Accounting & Tax Practice Business Valuation Benchmarks: sold-deal revenue and earnings multiples, 2021 to 2025; read October 12, 2026.
- CT Acquisitions, Accounting Firm Business Valuation: revenue multiples by size band, compression factors, CAS and outsourced CFO premium, PE EBITDA ranges; page updated October 12, 2026.
- Accounting Practice Sales, One Times Gross: Is That the Law? and the California listings as viewed September 23, 2026.
- Poe Group Advisors, What Is the Value of an Accounting Practice? (2026).
- Client retention after a sale: 75% to 80% on average (AICPA succession survey figure as quoted by ABA Advisors); 90% or better with a transition plan (Midwest Business Brokers).
- Robert Half 2026 Salary Guide: Los Angeles tax manager range.
- California Business and Professions Code 5063.3: confidential client information; (a)(4) sale or merger exception with a written nondisclosure agreement.
- 16 CCR 54.3, Sale or Transfer of Licensee’s Practice: 90-day client notice, presumed consent, four-year retention; operative April 1, 2024.
- California Business and Professions Code 16601: sale-of-goodwill exception to the non-compete ban. CBA, Accountancy Corporations (16 CCR 75.11, 30-day reporting). CBA, Retired Status (BPC 5070.1).
- Treasury Regulation 301.7216-2, paragraph (n): transfer of a client list with the sale of a tax return preparation business, and diligence under a written confidentiality agreement.
- IRS Rev. Proc. 2025-32: 2026 capital gain rate breakpoints. Form 8594, IRC 1060, IRC 197, IRC 453 and Publication 537. Treasury Regulation 1.1411-4, (d)(4)(i)(A).
- Franchise Tax Board, tax rates and tables (2025 schedules); Form FTB 3805E instructions; FTB Publication 1100, section C, Example 8; Revenue and Taxation Code 17043.
- California Labor Code 201 and 227.3: final wages and vested vacation on discharge.
- Wilshire Intelligence Network, For practice owners: process, terms and timeline; after-tax proceeds calculator: the $1,000,000 worked case.
This article is general information for practice owners and is not tax, legal or valuation advice. Multiples describe published sold-deal medians and broker guides at the dates shown, not the value of any specific practice. The California rate schedule cited is the 2025 schedule pending the Franchise Tax Board’s 2026 release. Confirm the California Board of Accountancy, Labor Code and residency rules with your own counsel before signing.
Denis is a practicing tax and accounting professional and the principal of VistaTax, a California practice serving individuals and closely held businesses: individual and business tax preparation, tax planning, bookkeeping, financial reporting and payroll. As WIN’s founding CPA he anchors the licensed side of the structure and sits at the table for every transition. More about WIN’s leadership.