Who Form 4797 Assets 2023-2024

This month's question comes from Dave who owns a small service based business and he asks well I have to pay taxes on the sale of my business Dave I'm answering your question in my next two episodes so I hope you catch them both welcome to this episode of accounting and tax tips smart strategies for small business success with certified public accountant Tina moe that's a great question Dave but there are a lot of details to consider when selling a business so the answer while most likely is yes contains many variables that will determine how much tax you'll pay whether it will be capital gain or ordinary income tax and when you'll pay the tax but first let's begin in this episode with the different types of business assets there are and let me provide some information about them so you have a very basic understanding of the terminology there are tangible assets and intangible assets and they are typically taxed differently when sold tangible assets at the most basic level are assets you can touch while intangible assets you cannot examples of tangible assets would be equipment vehicles of buildings and examples of intangible assets include goodwill customer lists and trademarks to name just a few within the tangible asset category you have both personal property and real property in my prior examples equipment and vehicles would be considered section 1245 personal property and the building would be considered Section 1253 Lee and when I use the term personal property I don't mean property that you personally own I'm referring to property other than a building which is referred to as a real property in the tax world so to recap equipment vehicles and tools are considered personal property and building structures are considered real...