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So, DH and I bought a business in 2001. Paid 30% down in cash, the rest financed via the SBA. We are incorporated as a C Corp, and file tax returns annually under that TIN. We now own the business free-and-clear.
Now DH wants to sell it, and move to something less physically taxing. He has a potential buyer for much of the equipment, who is also interested in the client list, bookkeeping materials, web site, etc.
We spoke with our business tax person about potential tax issues - and she was not very well informed on the subject. We have a couple of questions that didn't seem too complicated, but maybe they are. Anyways, I thought I could throw out a couple of them here.
1) If we sell the equipment, et al, to the other buyer, do we have a capital gain? I am assuming we have to calculate sale price + 12 years of depreciation on the equipment, plus the sale price/cash value of the good will/infrastructure. It's likely that we will not sell outright for anywhere near what we paid 12 years ago.
2) Will the CG be considered personal income for us? Or is it corporate income (essentially the same, since we're the only two officers)? What would the CG tax rate be?
3) Assuming there are CG tax to be paid, I'm assuming that structuring the sale over 2013 and 2014 could be useful?
Any recs on where to go to read more about this topic? Thank you!
Now DH wants to sell it, and move to something less physically taxing. He has a potential buyer for much of the equipment, who is also interested in the client list, bookkeeping materials, web site, etc.
We spoke with our business tax person about potential tax issues - and she was not very well informed on the subject. We have a couple of questions that didn't seem too complicated, but maybe they are. Anyways, I thought I could throw out a couple of them here.
1) If we sell the equipment, et al, to the other buyer, do we have a capital gain? I am assuming we have to calculate sale price + 12 years of depreciation on the equipment, plus the sale price/cash value of the good will/infrastructure. It's likely that we will not sell outright for anywhere near what we paid 12 years ago.
2) Will the CG be considered personal income for us? Or is it corporate income (essentially the same, since we're the only two officers)? What would the CG tax rate be?
3) Assuming there are CG tax to be paid, I'm assuming that structuring the sale over 2013 and 2014 could be useful?
Any recs on where to go to read more about this topic? Thank you!