If I sold my company for $6.5MM and $2MM went to debt repayment, do I get taxed on the full 6.5MM or 4.5MM?

ANSWER

The BIDaWIZ Team's Answer:

How is your business setup, as a C Corp, S Corp, Sole Prop, Partnership? If it's a C Corp is this an asset sale or a stock sale? Please note that with an asset sale, the purchase price is allocated to the various assets of the company and the debt that may be repaid is not factored into the equation as per IRC Section 1060. This means that it would not reduce the gain calculated for each of the asset classes sold.