Buying a Business

USA Discussion in 'General Accountancy Discussion' started by MikeL, Jun 13, 2018.

  1. MikeL

    MikeL

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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?
     
    MikeL, Jun 13, 2018
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  2. MikeL

    kirby VIP Member

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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.
     
    kirby, Jun 14, 2018
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