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 Brian Michels Your Own Question
Brian Michels
Brian Michels, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 162
Experience:  Partner at Michels & Hanley CPAs, LLP
98625913
Type Your Finance Question Here...
Brian Michels is online now
A new question is answered every 9 seconds

I am in the process of selling my business. The sale is $2.2

Customer Question

Hi
JA: Hello. What is your issue regarding?
Customer: I am in the process of selling my business. The sale is $2.2 million. The purchaser is going to get a loan through my bank for 1.4 million. I am considering carrying The rest of the note for 800,000. This is an employee that works for me. I realize there is risk but not. My question is why would I have to pay capital gains taxes on the entire 2.2 million. Since I'm not getting the entire amount until 10 years.
JA: Because the Accountant will solve your problem quickly right now and for a fraction of the cost of seeing an in-person Accountant. The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: i wasnt finished
Submitted: 6 months ago.
Category: Finance
Expert:  Brian Michels replied 6 months ago.

Hello. My name is ***** ***** I'll be the Expert assisting you today. I look forward to helping you with your issue today. You have an installment sale agreement. An installment sale is a sale of property where you'll receive at least one payment after the tax year in which the sale occurs. You are required to report gain on an installment sale under the installment method. You only pay taxes on the portion of the proceeds you receive each year. The gain for each year of the installment period is calculated by taking the total gain over the contract price multiplied by the annual payment. Each payment generally consists of three parts: 1) interest income 2) return on basis and 3) gain on the sale. In each year payments are received the seller must include income in both the interest portion (ordinary income) and the part that is the gain on the sale (capital gain).

I hope I’ve provided the information you were seeking. If you are happy with my service, your 5-star rating at this time is most welcome. If you need more help, please let me know so l can continue to assist you.

Expert:  Brian Michels replied 6 months ago.

I wanted to follow up and see if you had any further questions. If your question has been resolved I would appreciate your feedback rating so I receive credit for the response. Thank you

Expert:  Brian Michels replied 6 months ago.

I wanted to follow up and see if you had any further questions. If you have questions I am happy to assist. If you have no further questions I would greatly appreciate your 5 star rating so I receive credit for my responses. Thank you.