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KJLLAW
KJLLAW, Attorney
Category: Business Law
Satisfied Customers: 752
Experience:  Attorney at Law Office of KJLLAW
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I am looking to buy a local business and I am wanting to

Customer Question

Hi there I am looking to buy a local business and I am wanting to know if the tax records are right in line. I know that as a business owners try to hide as much money for right offs. I have the tax records and they state total sales but show lots of right off, so my my question is if this business would be a business to buy or stay away from.
Tax records show for 2014 total sales of $199923.00 and a loss of $5400
2013 $216480.00 with a loss of $5800
2012 $213890 with a loss of $5300
Owner is selling the business for $110000.00 he just wants out because he doesn't have the passion for the business anymore.
Submitted: 10 months ago.
Category: Business Law
Expert:  KJLLAW replied 10 months ago.

When purchasing a business and its assets, which includes it's losses you must be very diligent with conducting a thorough examination of the companies books and records. Legally you must do your due diligence and obtain a correct accounting of the actual profits and losses. Many businesses have two sets of books, one for the tax man and the other for themselves. My advice is to have a CPA examin the books and records to see if you are buying a profitable business.

Do not sign a purchase agreement until a tax professional looks at the books, receipts, records and other financial transactions.

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