I'm about to sell a site for $200k but I want to reduce my taxes as much as possible. I'm thinking of having two checks from escrow.com made to me, and cashing one our maybe a year later? So I only pay taxes on $100k each year, thus saving around $10k. Any tips would be great. Thanks.
I can only speak for the US but, You are taxed when you have "constructive" control of the money, not when you cash the check. So having 2 checks won't help you out. For taxes the IRS looks at the date of sale, not when you cashed the check. I strongly suggest you spend a couple hundred dollars and get some professional tax advice. It will save you in the long run. Go to an Enrolled Agent, or a CPA. Someone who has a few years experience.
The good news with escrow.com is that they would be happy to split the payment for you (with a small fee). The bad news is that KMP is correct. Ways around this problem would be to split the sale into two 50% chunks on consecutive days that fall either side of a tax cut-off point. In places like the UK you can gift 50% of the business to a spouse the day before sale. You could also reach a "buy-out" agreement with the buyer to spread payments and transfer ownership gradually.
I saw people getting Huge fines for this method a few times, years after the fact (UK and elsewhere). The tax people aren't totally insane actually
First of All congratulations for the money you got..Secondly, I would suggest you to consult a professional as KMP sugested..cos most of us here are small webmaster who are yet to reach there PS: are you selling the site in your sig?? thats a helluva domain name..
If you are making $200,000 you can (and should) have a lawyer draw up the sale documents, and an accountant help you with the financials. Heck, for the money you spend on escrow.com, you could probaly fly out to visit the buyer, and make the transfer face to face.
Where are you? The best option is to open an offshore account under a Anonymous corporation and deposit the money there. Talk to a lawyer and an accountant and make sure to watch you back, tax evasion is a big deal in most countries.
WOW! Do you own music . com? How did you get it? How long ago did you buy it? Congrats on the sale!!!
If you're really about to sell a site for 200K, then you should get off DP and go buy an hour of a good CPA's time. Ask a professional.
I hate to say this, but think you could get a lot more than $200k for music.com I wouldn't be surprised if you could get a million for it...
music.com Net Worth : $229979.2 Last updated Today Daily Pageview : 104196 Daily Ads Revenue : $315.04
If your talking about music(.)com you could get much more than 200k on it... Back on topic... consult a lawyer. That would be the best to do as a lawyer would know much more than anyone here and atleast i would feel safer geting advice from a lawyer than any website...
I don't recommend you do this due to the risk such as the buyer maybe cancel the another check when it reach next year. Well if you want to reduce tax,then you should use legal way such as by donating to authorize body,then you can cut some of your tax legally.