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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29774
Experience:  Taxes, Immigration, Labor Relations
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I am doing an asset sale of my LLC. The equipment is worth

Customer Question

I am doing an asset sale of my LLC. The equipment is worth about 15,000 and the Good will i put as 90000.00 and the non compete at $25,000. Is that the best tax structure for me. Will all but the $15,000 be cap gain?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
The gain on equipment - assuming was used in business operations more than a year - will be two parts - depreciation recapture will be taxed as ordinary income and the rest as long term capital gain.Goodwill - if previously purchased and amortized - will be treated similarly to above. If self-created goodwill - the gain will be regular income.The non compete agreement - will be regular income.Questions?
Customer: replied 1 year ago.
how do i minimize my tax rate liability
Customer: replied 1 year ago.
how do i structure it so i can capture the capital gains for the most part
Expert:  Lev replied 1 year ago.
Unfortunately - there is not much we may do as most of your gain will be taxed as regular income...There should be stock sale - not asset sale to qualify for long term capital gain.What you may do - sell on installments - and that will allow to spread the gain over several years.
Customer: replied 1 year ago.
okay thank you
Expert:  Lev replied 1 year ago.
Generally, both the purchaser and seller must file Form 8594 and attach it to their income tax returns when there is a transfer of a group of assets that make up a trade or business and the purchaser's basis in such assets is determined wholly by the amount paid for the assets.
Expert:  Lev replied 1 year ago.
The gain on self-created intangible - such as goodwill and non compete agreement - is ordinary income.So - we need to start with a list of assets - and will need to assigned a sale price to each asset - as agreed between parties...I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.