When you acquire a business through an “asset purchase,” you win in two ways. You can generally avoid exposure to unknown or undisclosed business liabilities. The tax-basis of the assets can be stepped up (increased) to reflect the purchase price that you pay for the business. The step-up gives you bigger depreciation and amortization deductions. But there’s another … [Read more...]
Choice of entity
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How to buy a business the smart way
Thinking about buying a business? Then one of the most important decisions you’ll have to make is whether to purchase the assets of the business or the ownership interest in the business. And remember, either way there are important legal and tax issues to consider. If you are planning on buying a C or S corporation, a partnership, or an LLC (that’s treated as a … [Read more...]
How to choose the right business entity (Part 2)
In Part 1 of this two-part series, we discussed the pros and cons of forming a sole proprietorship and a single-member LLC (taxed as a proprietorship). In Part 2, we discuss what the three possible corporate forms of business have to offer. You’ll get the whole story (the good, the bad, and the ugly) when you read my new article titled Tax Tips: Choosing the Right Entity … [Read more...]
How to choose the right business entity (Part 1)
Are you starting a business or thinking about buying one? Then you’ll have to consider which form of business entity you’re going to establish. A sole proprietorship A single-member LLC An S corporation A C corporation Each form of business has its own advantages and disadvantages which we’ll analyze in our two-part series. In part one, we’ll examine the … [Read more...]
How your start-up can save big money
Lawmakers finally got it! They realized that it takes time to grow a new business and that it may not generate tax revenue for a while. So they put some extremely helpful rules into the Protecting Americans from Tax Hikes (PATH) Act of 2015. If you are thinking about starting a new small business, you may be able to save a lot of money. But you have to know how to play … [Read more...]