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Video instructions and help with filling out and completing Can Form 4797 Gains

Instructions and Help about Can Form 4797 Gains

Today we're talking about capital gains versus ordinary income tax it's such a hot topic it was the first question that I got right out of school over ten years ago and then this weekend I was in a wedding and it was the topic at the wedding as well someone knew I was a CPA and they cornered me and wanted to ask about a sale that was upcoming and what the rate would be capital gains taxes are lower than ordinary income tax rate so you typically in an income situation what's the capital gain tax rate rather than the ordinary income tax rate when more than half of your sales price could go to taxes you would like to allocate part of your purchase price to capital gains taxes rather than ordinary to keep more of your money on the sale with businesses sometimes you have a business that can sell and buyer and seller must agree on that sales price and once they agree on that sales price they can allocate that sales price among items such as goodwill or land or fixed assets and a lot of times we can help save taxes by allocating different parts of that purchase price to different items that will generate that capital gain tax rate rather than ordinary a good example would be a business that say sells for a million dollars a part of the letter and intent could allocate some of that money to a non-compete and while a non-compete is important the more of that sales process allocated to that non-compete could generate ordinary income tax rates when more than half of your sales price could go to taxes it's important that you try to work with that buyer to shift that allocation to something...