If I buy a liquor store today for $100,000 & sell it 3 years later for $200,000, is there capital gains tax?

Question

or any other special taxes like that? the liquor store is in Los angeles.

Answer 1

Yes, there will be cap gains, but there can be deductions for that. For instance, if the inventory when you bought was $20,000 and you are selling it with inventory at $60,000, you reduce it by $40,000. Also, did you need to replace the roof and A/C? What other improvements have you made? These all reduce the capital gains.

Please, see a CPA so you know exactly what you will make from the sale.

Answer 2

Hmmm...ignore most of what 'halestrm' said and pay more attention to what 'Nstarz' said.
Both the buyer and the seller of a business are required to file a form 8594 to report what part of the purchase price is allocated to each (or class of) asset(s). And, these forms have to agree.
What 'halestrm' suggested about increasing the inventory is Bull____. Increasing the inventory would be an ordinary gain, which usually means more tax than a capital gain. (Yea, right ask a CPA about taxes...most CPA's are auditors...if you want to know about taxes ask an Enrolled Agent, or at least a CPA that specializes in taxation).
It seems to me that you don't understand a capital gain tax is generally better than an ordinary gain tax. It is either one or the other it is never (well, most of the time...it could be both with corporations and such involved) both. Or, perhaps you are getting business property confused with the new rules for selling a residence.

Answer 3

When a business is bought or sold, both the buyer and seller of business assets must report to the IRS the allocation of the sales price and other business assets. IRS Form 8594 (Asset Acquisition Statement Under Section 1060) can be used to provide this information. Form 8594 should also be attached to the buyer and seller's federal income tax return for that year.

http://www.irs.gov/pub/irs-pdf/p544.pdf

Publication 544 will give you more information. Start on Page 25 under "Ordinary or Capital Gain or Loss for Business Property"

Answer 4

Yes. There will be capital gains tax on the general sale of the store.

Also, you will have to charge sales tax on all of the equipment that is being transferred to the new owner.

Answer 5

For residential belongings, if this is greater tan 2 years in view which you purchased it, you do not would desire to pay capital advantageous factors upto a shrink. this is benefit given to place of living. yet time does not rely for corporation. despite in case you sell the following day, next year, 10 years later or greater, you're able to desire to pay capital advantageous factors tax in case you get greater beneficial than what you paid for.

Answer 6

capital gains would be approximately 25% of the difference. So it would be $50,000 times 25%. That would be your capital gains tax.

Answer 7

Maybe, maybe not. There's no where near enough information to answer your question with a yes or no answer.

Answer 8

not if you truly love to drink, then no.