What is a primary benefit of stock sales in terms of taxes for sellers?

The primary benefit of stock sales in terms of taxes for sellers is the ability to avoid corporate-level tax. When a company sells stock, it does not incur a corporate tax on the proceeds from that sale. Instead, the taxation occurs at the investor level when they realize gains from the sale of the stock. This structure allows for a more favorable tax treatment compared to other forms of income that might be subject to corporate-level taxation before reaching the shareholders.

This approach is advantageous for sellers because it simplifies the tax implications of selling stock while also potentially increasing investor returns by allowing more of the capital appreciation to remain with the shareholder rather than being taxed at the corporate level first. This feature plays a significant role in encouraging investment in stocks and promoting a more straightforward realization of gains for individual shareholders.