how much will taxes kill me do you think?

Discussion in 'General Business' started by seant, Aug 3, 2006.

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  1. #1
    So there is a chance I may sell a site for around 20,000 and I am just wondering what taxes are going to do to such a figure? I live in NY state.

    Thanks!
     
    seant, Aug 3, 2006 IP
  2. amokk20us

    amokk20us Peon

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    #2
    Im not sure how the American Tax System works, but just as an idea. Your could ask that the 19K be paid to you as a service fee. and the other 1K as a capital transfer.

    That way you can include the 19K as your personal income tax and the 1K as business capital gain. Which will mean less tax.

    Have you spoken to a business accountant? Using Escrow may help.

    Beofre doing anything, make sure the other party agrees to the arrangement. and that its not breaking any laws ;)
     
    amokk20us, Aug 3, 2006 IP
  3. kevinn

    kevinn Active Member

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    #3
    tell em to pay you CASH under the table
     
    kevinn, Aug 3, 2006 IP
  4. iowadawg

    iowadawg Prominent Member

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    #4
    But then with 20 grand in cash, hard to put into the bank at one time as they will report the cash to the IRS.

    You can figure as a base here in the US (lots of depends, like income, etc etc etc) about 1/3 will go off into taxes.
     
    iowadawg, Aug 3, 2006 IP
  5. seant

    seant Peon

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    #5
    hmm 1/3 how do you figure? I have used a few tax calculators on that amount as additional income and it is around 1200 it seems. I just want to know if I am missing something...

    thanks
     
    seant, Aug 3, 2006 IP
  6. seant

    seant Peon

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    #6
    So I might be selling a site for low $xx,xxx and come tax season if I file that as additional income it's going to set off a red flag compared to my part-time job during college right?

    What should I do to prepare myself/do it right? I filed my google adsense as additional income during tax season, and did not consider my site a business.
     
    seant, Aug 5, 2006 IP
  7. Colbyt

    Colbyt Notable Member

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    #7
    As long as you reported the Google income somewhere you have no problems there. It would have been better to claim it as business income but that is water over the dam. If it was a large amount of money an ammended return might be in order. After expenses that could only lower your previous tax liability.

    Your sale of the site will be treated as a capital gain, either long or short depending on the period of ownership. Thanks to the Republicans the tax rate on capital gains is lower than the regular tax rate.

    Also since you did not file as a business I am sure you must have some associated expenses for the purchase and start up cost for this domain. All of those will decrease the amount of income and you only pay taxes on the NET profit. Think about this and gather those receipts!

    Congratulations. You are better off than you thought you were.
     
    Colbyt, Aug 5, 2006 IP