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Company Buyout Clarification

1,227 Views | 3 Replies | Last: 6 yr ago by ChoppinDs40
TheAggieInventor
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Hello,

quick question...if I wholly own my private business, and someone offers to buy it for $1 million and I accept.... Is my take home $1 million less taxes and lawyer expenses involved? Or is there some rule of thumb for if I sell a business I own 100% of, what percentage I would actually take home after given expenses?

Thanks
The Wonderer
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AG
That is all negotiated prior to closing (allocation of closing costs). Basically, you're taxed on the money that is wired to your account upon closing dependant on some things. Also depends on asset sale or stock sale due to the potential continual carrying of liabilities in an asset sale and other more complicated tax issues that I'm not able to fully articulate (not a CPA).
gig em 02
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Don't get cheap when choosing legal/accounting counsel. I don't know your business but I've seen people lose tens of thousands on small deals just because they wanted to save a couple hundred dollars.
The Wonderer
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AG
gig em 02 said:

Don't get cheap when choosing legal/accounting counsel. I don't know your business but I've seen people lose tens of thousands on small deals just because they wanted to save a couple hundred dollars.
+infinity
ChoppinDs40
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AG
If you sell "assets", taxes as ordinary income.

Stock? Depends on your basis and the related gain.

Even if you end up needing to sell assets for liability purposes, a fair buyer will "make you whole" and make up the difference on the taxable difference.

Get an M&A attorney, not your regular joe blow contract guy.

Same with CPA.
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