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I own an LLC with my wife in Maryland and we're thinking of selling a website business. The sale price is $350,000, and I started it with $0. I currently pastor and get a $18,000 a year housing allowance and $36,000 income and cannot claim social security. My wife does not work. If we sell this business in 2011 what is our tax burden for this sale and what if anything has to be paid right away? The sale would be one lump sum of $350,000 not in payments although is there a better way to do this? Our LLC will not be sold, only the website and we have another website as well that does something similar for a different niche.
ANSWER
Expert Mark Anderson's Answer:
You can calculate the capital gains by taking the sales price less your basis. Since you basis is zero you will have a large capital gain. The rate depends upon how long you held the asset and what tax bracket you are in. You may be able to elect to use the installment payment method if payments would be made over time. You might want to consider some other options like a 1031 exchange. I would check with your CPA or tax attorney.
