How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Wallstreet Esq. Your Own Question
Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 577
Experience:  10 years experience
16356563
Type Your Tax Question Here...
Wallstreet Esq. is online now
A new question is answered every 9 seconds

I own a single member LLC in California, I am looking to

Customer Question

I own a single member LLC in California, I am looking to sell it in the next 6 months to a year, I need to know the best way to sell it, i.e. as goodwill, as assets, etc. I completely understand that the buyer may not cooperate, but I need to negotiate for me, and before I can do that I need to know what to ask for.
So should I sell the majority as good will, should I restructure to a S Corp, what is the best move? This is purely a tax question on what will save me the most on taxes for the sale of the business?
Submitted: 8 months ago.
Category: Tax
Expert:  Lev replied 8 months ago.

The best way for you is to convert LLC to S-corporation and hold shares at least a year - and sell SHARES after that - in this case all gain will be treated as long term capital gain - taxable at reduced rates.
If that is not feasible - your only option would be to go with asset sale.

Customer: replied 8 months ago.
If I go with an asset sale vs goodwill will the savings be significant? If I convert to an S-Corp and hold the shares for a year as you suggest, does this get me out of state tax in ca? what is the estimated % of savings on a million dollar sale, S-Corp vs LLC, or asset vs goodwill .....not looking for an exact percentage, just some best guesses?