Sale of Business Taxes?

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Subject Author Date Sale of Business Taxes? Jay Search 01-25-2007  Re: Sale of Business Taxes? Shyster1040 01-26-2007  Re: Sale of Business Taxes? DORFMONT@aol.com (Linda D... 01-26-2007  Re: Sale of Business Taxes? Seth Breidbart 01-26-2007
Posted by Jay Search on January 25, 2007, 2:43 am Please log in for more thread options I have a question, i have been wondering about for some time. If I were to sell my company in Nevada for let's say 60 million, and I own 100% of this company. How Much would the Government take of this sum? And is there ways around not paying taxes for sale of business? << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Shyster1040 on January 26, 2007, 5:39 am Please log in for more thread options What's your cost basis in the business, and are you stucturing it as an asset sale or a stock/LLC interest sale? << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by DORFMONT@aol.com (Linda Dorfmo on January 26, 2007, 5:39 am Please log in for more thread options > I have a question, i have been wondering about for some > time. If I were to sell my company in Nevada for let's say > 60 million, and I own 100% of this company. How Much would > the Government take of this sum? And is there ways around > not paying taxes for sale of business? You could do a 1031 exchange of the assets. You must be very careful to exchange real estate for real estate, machinery for machinery of the same type, and other assets for assets with the same characteristics and class life. you would end up owning another business but you would avoid taxes on the exchange. Don't sell the assets of the business and then sell the stock to clear out the cash. I recently figured out the tax consequences of doing this for clients who had a large real estate holding in a C corporation. They would get less than 30% of the sale proceeds doing it this way. If they just sold the stock in the corporation they would keep almost 60%. It is cheaper to find a buyer for your corporation and pay the capital gains taxes at your personal rate. Then start a new corporation if you want to continue in business. Linda Dorfmont E.A., CFP, CSA << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Seth Breidbart on January 26, 2007, 5:39 am Please log in for more thread options > I have a question, i have been wondering about for some > time. If I were to sell my company in Nevada for let's say > 60 million, and I own 100% of this company. How Much would > the Government take of this sum? Probably it's long term capital gain, so about 15% Federal. > And is there ways around > not paying taxes for sale of business? They can be deferred, perhaps to your death. For instance, if you sold to a public company in a stock-for-stock merger, you'd own $60 million worth of their stock. (Of course, that would be taxable when you sold it.) There also used to be some special rules about selling out to an employee stock ownership plan, which let you defer taxes if you reinvested the money in securities. I don't know if they still apply. Seth << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Similar Threads Posted Tax structuring the sale of a business April 13, 2007, 3:11 am Inventory at Sale of Business June 23, 2006, 3:10 am Business use of home - Sale of house September 1, 2009, 12:19 am Sale of Business-Seeking Tax Experts' Opinion January 28, 2007, 6:13 pm Cost basis of intagible assets in sale of small business February 6, 2007, 9:20 pm Taxes for my Business, Help! July 28, 2007, 12:24 am Business taxes for an out-of-state LLC ? 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