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INTRODUCTION Hello. My name is Eric Gall. I am a business
intermediary with Florida Business Exchange in Southwest Florida. If you are looking to
sell your business, you likely have quite a few questions about the process. This video
short is one of 18 I have created in a series to answer your most frequently asked questions.
WHAT ARE MY TAX IMPLICATIONS? Another excellent question I receive from
sellers is what are the tax implications associated with the sale of a business. I advise all
sellers to have a more in-depth discussion with their CPAs; however, here are the basics
of how gains are catagorized: Gains in excess of depreciation realized from
the sale of tangibles assets such as furniture, fixtures and equipment, all leasehold improvements
made to a building, registered vehicles and buildings and land are taxed at the long-term
capital gains rate. Any gains realized due to a lease rate below
market, liquor licenses and goodwill are also taxed at the long term capital gains rate.
Gains on assets held less than one year and the value of a non-compete agreement, customer
list and inventory are taxed as ordinary non-passive income.
Finally, training and consulting agreements are taxed as ordinary earned income.
Again, involving your CPA in the sale of your business can help structure the sale to minimize
your tax burden. I am always happy to work with a seller's CPA.
CONCLUSION Thank you for listening. If you have any questions
about this topic, or any other topic, please do not hesitate to contact me at 239-738-6227
or eric@buysellflbiz.com. I'm here to help you prepare your business for your eventual
exit.