Ok guys, I am diving in. Been reading a bunch, and learning a lot just in case I need to go down this path. My business is seasonal, so I can't say yet if I can pull through this or not, but have been preparing just in case.
In February I sold an LLC that owns a retail business. 80% services / 20% product sales. Personal care business. My family member had taken a mortgage against their house to assist with the initial financing. The location means this business has potential. Every year for several years now there is a line on each of our tax return showing my old LLC taking an interest deduction for mortgage interest on her home, and her taking it as interest income. So there is a trail of their being a loan in place.
She formed an LLC, and took over the business. I am current on all bills, but unsure of the future based on a variety of issues that have arisen within my industry and other business dealings.
The purchase agreement between her company, and my old one states that for forgiveness of debts incurred against her house, and other debts (retirement funds), my LLC has sold her the assets in exchange for a release from those debts. We valued the business very fairly in my opinion, considering the economy, and type of business it is, as well as based off of its annual gross sales. She paid a significant bulk sales tax amount based off of that number.
I don't see an issue with waiting until after February of this coming year (if at all, depending on business) to file since I am currently up to date with all bills, just to be on the safe side as far as preferential payments go.
I met with an attorney who made the recomendation to wait at least until then if I have to, and feels comfortable that it is a reasonable transaction.
I wanted to get some of your thoughts?
Thank you
In February I sold an LLC that owns a retail business. 80% services / 20% product sales. Personal care business. My family member had taken a mortgage against their house to assist with the initial financing. The location means this business has potential. Every year for several years now there is a line on each of our tax return showing my old LLC taking an interest deduction for mortgage interest on her home, and her taking it as interest income. So there is a trail of their being a loan in place.
She formed an LLC, and took over the business. I am current on all bills, but unsure of the future based on a variety of issues that have arisen within my industry and other business dealings.
The purchase agreement between her company, and my old one states that for forgiveness of debts incurred against her house, and other debts (retirement funds), my LLC has sold her the assets in exchange for a release from those debts. We valued the business very fairly in my opinion, considering the economy, and type of business it is, as well as based off of its annual gross sales. She paid a significant bulk sales tax amount based off of that number.
I don't see an issue with waiting until after February of this coming year (if at all, depending on business) to file since I am currently up to date with all bills, just to be on the safe side as far as preferential payments go.
I met with an attorney who made the recomendation to wait at least until then if I have to, and feels comfortable that it is a reasonable transaction.
I wanted to get some of your thoughts?
Thank you
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