do you have to pay taxes for selling your business?
let's say that i want to sell my business for 1 million and i live in florida. do i have to pay taxes from this profit of 1 million? if so, what would be the tax percentage?
how much would i have to pay? 20% 30%??
- 10 years agoFavorite Answer
You pay taxes on any amount that you sell the business for above your current basis in the business. Essentially your basis is the amount of money you paid to buy the business. If you did not pay any money to buy the business then your basis is 0. If you paid 200K to buy the business then you would pay taxes on 800K (1Million - 200K).
If you owned the business for less than 1 year then the tax treatment is a short term capital gain which in your case would be the highest marginal tax rate which is 35%. However, if you have owned the business for over 1 year then your gain would be taxed as a long term capital gain which is 15%. At least that was the percentage under the Bush tax cuts. I'm not sure if anything has changed the rate under the new tax compromise.
- 10 years ago
you have to pay taxes on any profits.