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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
Experience:  10 years experience
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I founded and own a sales consulting business. The ...

Customer Question

I founded and own a sales consulting business. The business grew to employ 50 people but recenly I decided I wanted out due to a partnership dispute. I have about a $400,000 loss in the business and I was selling about 10% of the company for $100,000. My CPA says that I am going to get crushed with a big tax bill next year...but not because of the $100,000 buyout, rather because I will need to pay taxes on the $400,000 loss. Can you please explain this to me? Is there any way around this?
Submitted: 9 years ago.
Category: Tax
Expert:  Marvin,EA replied 9 years ago.
Hello and thank you for using Just Answer. Do you know your basis in the business? Did you have a gain for tax years 2005, 2006, 2007? Are you going to sell only 10% of your share of the business or 100% of your share of the business? Did your CPA tell you why you will be paying taxes on a loss of $400,000 when you sell to your partners?