![]() ![]() Once the agreements are signed‚ you may have trouble doing this so speaking to your accountant beforehand is critical. However‚ I have seen situations where hundreds of thousands of dollars were saved in taxes by modifying the business structure before the sale. Each transaction has different components to it‚ and it will depend exclusively on your particular situation. In certain situations‚ your accountant may advise you to transfer a portion of your business or the assets of your business to a different person or entity‚ setup a new entity and/or dissolve your current entity before the sale takes place. Setting up structure before sale takes place.Although asset sales are more common and preferred by buyers‚ if the tax advantage of a stock sale is drastic‚ it may pay to hold out for a buyer willing to accept a stock sale. The tax implications between the two methods can be substantial. Your accountant will have many functions and responsibilities throughout and after the business sale process‚ including:īefore placing your business on the market‚ your accountant will be able to tell you the advantages and disadvantages of selling your business either as an asset sale or stock sale. Not only do you need to speak to your accountant‚ you may have to hire additional accountants to sell your business with peace of mind. If you can’t tell‚ I think accountants are one of the three major members (along with a business broker/investment banker and business attorney) of your team. Sure there is a possibility that he could land in a mattress factory‚ but the odds aren’t good. I proceeded to tell him that accountants are such an important part of the business sale process‚ that it was like asking me if he should go skydiving without a parachute. ![]() See WAC 458-20-216 for more information about successor liability.Recently‚ I had a client in my office asking me whether or not he needs to speak to his accountant about the business terms before he puts his business on the market. Under Washington 's successor liability law, the buyer must hold back enough money to pay off any taxes due, unless the former owner can prove that they have paid the tax or that no tax is owed. Therefore, the buyer should require the seller to provide a Tax Status letter obtained from the Department of Revenue. If any tax due is not paid within 10 days of the sale of the business, the new owner is liable for the full amount of tax. ![]() The buyer of a business may be liable for the unpaid taxes of the former owner. Also, sales of a controlling interest (50% or more) of an entity (corporation, LLC, partnership, etc.) that owns real property located in Washington are also subject to real estate excise tax. Sales of real estate are subject to the real estate excise tax which is paid to the county treasurer when the change of title is recorded. If you have questions about the personal property tax, contact your local county treasurer or assessor. Property tax must be paid to the county treasurer if the property will be sold, destroyed, disposed of, or removed from the county. Generally, the county treasurer's office must be contacted when a business is sold. Persons selling their business must file a final tax return, with payment, within ten days of the sale. Sales of intangible assets, such as good will, are not typically subject to either business and occupation tax or retail sales tax (casual sales). If a reseller permit is not given, retailing B&O and retail sales tax applies. If the seller obtains a reseller permit then the sale is subject to the wholesaling B&O tax. The sale of inventory is subject to B&O tax. Reference books and magazine subscriptions However, this does not relieve the seller from the obligation to collect retail sales tax on such sales. These sales qualify for the "casual or isolated sale" B&O tax deduction. ![]() Sales of capital assets and consumable supplies are not subject to business and occupation tax (B&O) if the seller does not regularly sell this type of property. Sales of some assets are subject to the business and occupation tax and/or retail sales tax, while others are not. When a person sells a business, the tax requirements vary with what is being sold. ![]()
0 Comments
Leave a Reply. |