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Selling Your Business

Taz

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Sep 15, 2019
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How exactly does the process of selling ones business work? For those of those who've sold your business. I'm sure its more complicated than buying a candy bar. My questions basically are
1. If you are a sole proprietor, LLC, or C/S Corp, how much of the sale actually goes to you? Excluding taxes being taken out.
2. How are you taxed on the sale? By normal income tax or sales tax? Are there ways to reduce that tax?
3. Is it possible to make the buyer pay the taxes as well as the selling price?
 

CareCPA

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I would worry about that once you have a business. Judging by your other posts, thinking about this is a waste of time.
 
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Taz

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Sep 15, 2019
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I would worry about that once you have a business. Judging by your other posts, thinking about this is a waste of time.
While it is true I'm currently not near my goal of creating my own Fastlane business, I do not think my question is a waste of time because for me all knowledge is good for me and obtaining it is an excellent use of my time. There is no such thing as stupid questions, only irrelevant ones and for the nature of this forum, I believe it is definitely relevant.
 

Tourmaline

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What is Action Faking for $500.
 

biophase

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because for me all knowledge is good for me and obtaining it is an excellent use of my time. There is no such thing as stupid questions, only irrelevant ones and for the nature of this forum, I believe it is definitely relevant.
Ok I will answer your questions but most of it won’t matter or you won’t understand them because you aren’t there yet.

1. If you are a sole proprietor, LLC, or C/S Corp, how much of the sale actually goes to you? Excluding taxes being taken out.

All of it. Why would you not get all of it?

2. How are you taxed on the sale? By normal income tax or sales tax? Are there ways to reduce that tax?

Some is capital gains and some will be ordinary income depending on how you structure the sale.

Yes you can reduce them by getting paid in installments.

3. Is it possible to make the buyer pay the taxes as well as the selling price?

No. Just ask for a higher sales price.
 
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Taz

New Contributor
Read Millionaire Fastlane
Sep 15, 2019
37
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Ok I will answer your questions but most of it won’t matter or you won’t understand them because you aren’t there yet.

1. If you are a sole proprietor, LLC, or C/S Corp, how much of the sale actually goes to you? Excluding taxes being taken out.

All of it. Why would you not get all of it?

2. How are you taxed on the sale? By normal income tax or sales tax? Are there ways to reduce that tax?

Some is capital gains and some will be ordinary income depending on how you structure the sale.

Yes you can reduce them by getting paid in installments.

3. Is it possible to make the buyer pay the taxes as well as the selling price?

No. Just ask for a higher sales price.
Thanks for your answer. Although I do have to wonder, what was so difficult to understand about your post? Yes, this doesn't apply to me right now, but its certainly not outside of my scope of understanding.

Anyways, I thank you for your answer.
 

biophase

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Thanks for your answer. Although I do have to wonder, what was so difficult to understand about your post? Yes, this doesn't apply to me right now, but its certainly not outside of my scope of understanding.

Anyways, I thank you for your answer.
Because you wouldn’t know the meaning of the terminology used to structure the sale or even how installments work.

Also your question was a little odd. Asking about sales tax and making the buyer pay the taxes... You can’t have anyone pay your taxes without incurring more taxes. Lol

I think CareCPA answered the way he did also because the taxes of selling your business are just not what someone thinks about most likely until they are about to put the company up for sale.

Although you should probably move to a no state tax state before you start your biz.
 
OP
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Taz

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Read Millionaire Fastlane
Sep 15, 2019
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Because you wouldn’t know the meaning of the terminology used to structure the sale or even how installments work.

Also your question was a little odd. Asking about sales tax and making the buyer pay the taxes... You can’t have anyone pay your taxes without incurring more taxes. Lol

I think CareCPA answered the way he did also because the taxes of selling your business are just not what someone thinks about most likely until they are about to put the company up for sale.

Although you should probably move to a no state tax state before you start your biz.
That's true but with an answer, I can use that to continue my research. Haha without one, I wouldn't even know where to begin.

The reason is, I see people doing giveaways or whatever and let's say its money, they claim that you'll win money and they will pay the taxes so you don't have to. I just thought that maybe the rich do some tactics like that to reduce their tax. I understand they get taxed upwards of around 50% if I'm not mistaken and although thats a good problem to have, that's a lot of freaking money haha.
 

CareCPA

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While it is true I'm currently not near my goal of creating my own Fastlane business, I do not think my question is a waste of time because for me all knowledge is good for me and obtaining it is an excellent use of my time. There is no such thing as stupid questions, only irrelevant ones and for the nature of this forum, I believe it is definitely relevant.
I respectfully disagree.

Each day, you have finite time and energy. Therefore, how you use that time and energy is extremely important.

Yes, in general, more knowledge is better than no knowledge. However, focused knowledge is better than more knowledge.

The reason that worrying about the exit is a waste of time is because it may never happen. By spending time worrying about the end of the business, you're stealing the time you should be using to start your business. If your business never starts, then there will be no exit, so the question about the exit is pointless.

This also relates to the thread that started yesterday about reading books.

Knowledge and business go hand in hand, but there is a logical progression. Do you know how to start? If not, get the knowledge on how to start.

Do you know how to grow? If not, get the knowledge to learn how to grow.

Do you know how how to advertise? If not, get the knowledge on advertising.

Do you know how to manage employees? If not, get the knowledge on managing employees.

Hopefully by now you're seeing the pattern - but do them in the order they're needed, not sporadically or all at once.

Yes, there is a point where you get to the "big picture/meta knowledge/whatever" books. But you often see those books on the lists of "most successful CEOs." Why? Because they've already accumulated the day-to-day and operational knowledge they need, so they can move onto the next level of knowledge.

Solve the problems in front of you to take the next steps in your business. Anything else is a waste of time.
 

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