[Hidden-tech] Buying a Business to Avoid Profit Tax

[Rich Roth - Webmaster]

Rob,

Yes, but -- Tax deductible expenses only include capital expenses to a 
certain degree -- check the rules
for section 179 deductions.

Buying a business usually means a capital expense -- that is because you 
are mainly buying client revenue and name value.

you might be acquiring operating expenses for the year, although what 
expenses does a small business have ?
You might be buying inventory -- so that would be key to making it worth 
deduction.
An example of this is my daughter and husbands business:
     https://www.amherstarchery.com/
While mainly a school, they also sell archery equipment they re-sell or 
make.

Yeah, it's a challenge I've seen before, the best solution I've found is 
to bunch expenses on alternate years.

Another idea more in your field is to expand by taking on projects that 
would cost, esp, staff expenses,
that would than create more revenue or sell-able products or online 
services, esp SAAS,
such as SEO related Wordpress plugins that need your service to operate.

Would be interested in discussing such ideas.

And for reference, not an account, just 30 years of running small 
businesses.

Rich

On 9/22/2017 11:48 AM, Rob Laporte wrote:
> Hi HTers,
>
> I hope many of you have faced the situation that a sole proprietorship 
> or S-Corp (and LLC too?) means that annual profits are taxed at high 
> personal income tax rates. Buying whatever one needs at the end of the 
> year is often a way to reduce that tax hit, but often a business 
> doesn’t really need to buy much. Buying a whole business, preferably 
> related to one’s own business, would work too, as far as my low 
> knowledge of tax law goes.
>
> For search marketing and conversion rate optimization (CRO) firms like 
> mine, any online business that does not require a huge new skill set 
> would be a candidate for acquisition. Most smaller businesses don’t do 
> or can’t afford to do search marketing and CRO well, creating big 
> opportunities for search marketing and CRO firms to realize that 
> potential. Of course all kinds of businesses do such acquisitions, 
> especially big businesses that get financing so cheap these days 
> thanks ultimately to Fed money printing.
>
> So, this email has two threads. (1) anyone had experience with this 
> issue they’d care to share? (2) do you know anyone who might want to 
> sell for cash a small business that sells mostly online?
>
> Best Regards,
>
> *Rob Laporte*
> Founder & Managing Partner
> *DISC, Inc. - "Making Web Sites Make Money"*
> 413-584-6500
> Rob at 2disc.com <mailto:Rob at 2disc.com>
> www.linkedin.com/in/2disc <http://www.linkedin.com/in/2disc>
> www.2disc.com <http://www.2disc.com>
>
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-- 
Rich Roth
Hidden-Tech
webmaster/board member
http://www.hidden-tech.net
Sponsor: http://www.thrivesmedia.com

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