An internet business is for sale. It has a zero cost basis. Although the asking price does not seem unreasonable, IMRHO I can see someone paying cash up front for it since the owner is going to Canada for 2-3 years.
He asked me if instead of selling the business what would be the tax consequences of leasing it with an option to buy in
2-3 years. My reaction was that would ne converting capital gains into ordinary income! I suggested he sell the URL and the software on a contract basis. He was afraid the IRS would treat it as though he sold it and had to capture the income in the year of sale. My reaction was "Go see someone who knows more about this situation than I do".Other than agreeing with may advice on seeing someone else, how would you handle this?
Some people think I know taxation. Most people seem to think accounting is fungible!
Dick
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