OT: Capital tax question

[RU Diesel07110]

Anyone have info on capital gains taxes on a business sale? Is there any way to reduce the 35%?

 

[Bigs Hanter]

Not enough information to answer this, but LTCG tax rate is only 20% (23.8% with NII). Are you including state tax? or is there recapture? or is it short term?

 

[phs73rc77gsm83]

Not enough information to answer this, but LTCG tax rate is only 20% (23.8% with NII). Are you including state tax? or is there recapture? or is it short term?

Yes, and a stock deal would be preferable to an asset sale In terms of tax treatment.

 

[RU Diesel07110]

Not enough information to answer this, but LTCG tax rate is only 20% (23.8% with NII). Are you including state tax? or is there recapture? or is it short term?

Sale was in sept. Acct says 25% fed 10 state. He’s basically saying there’s no real alternative. It’s not real estate so no 1031, there is an economic zone option but it sounds sketchy and I think would have to be done within a time frame.
the only thing I have seen is called Wyoming reserve, considered an economic zone but finance guy said they don’t have any background,8 kind of a startup, and the cap gains tax would be deferred and paid out of the supposed 18% return.

 

[RU Diesel07110]

Asset sale

 

[phs73rc77gsm83]

Asset sale

That will likely be taxed as income rather than LTCG. Generally, a stock sale would be highly preferable. im sure you are/will but figure out the tax implications of the two. It’s likely be preferable to structure a stock sale even at a lower sale price.

 

[mdk02]

Asset sale

So the sale is taxed at the corporate level. That's a key factor.

 

[phs73rc77gsm83]

So the sale is taxed at the corporate level. That's a key factor.

C corp or S corp? Sounds like a C based on the OP suggested tax rate?

 

[RU Diesel07110]

S corp. fire protection co.