USA Buying a Business

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Hello all,

Looking for some advice.

I took over a business that didn't require I put up any money up front. But It requires that I make installment payments from future earnings to the seller. Can the payments to the seller be used as basis in the future when I sell the business?
 

kirby

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Yes. If you agreed "I will pay you a total of X from future earnings" then X will be the basis after you pay.
If you agreed "I will pay you a % of earnings for the next 5 years" then basis is the total of what you finally pay.
 

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