Sale of Business/Capital Gains/Intangible Assets before the Tax Law Change: I am currently helping a gentleman sell his business: Asset Sale vs. Stock Sale vs. Stock Sale treated as an Asset Sale. Old World Paradigm. Allocation of Purchase Price seems to be more important than ever given Seller’s desire for maximum Capital Gain treatment before the law changes.
E-commerce Platform and Intangible Assets. Capital Gain Treatment? 10 years ago, only about 17% of businesses were virtual, but now up to 90% (a statistic I read; but not unverified) are either virtual or have a huge virtual E-commerce component. How do you value that component? How do you monetize that component when that component is an off-balance sheet item? Does your E-commerce platform = “Computer Software” (Old World thinking) which is a General Intangible Asset? Is my tradename (brand) anchored to a URL…. a general intangible? But that is not where the internally created Intangible Assets to be monetized reside. Would it be prudent from a business standpoint to know what your self-created intangibles are worth?
Where does the value of self-created Intangible Assets reside? My thesis:
Fair Market Value of all Assets MINUS
<FMV Physical Assets>
<FMV Acquired Goodwill>
<FMV Acquired Intangible Assets (Subject to Recapture as Ordinary Income)>
SHOULD EQUAL:
Created Goodwill (Capital Gain Asset)
PLUS
Created Intangible Assets (Capital Gain Asset?)
*How does a Business Owner monetize the value of self-created Intangible Assets which are part of financial cyber space? How is this Intangible Asset taxed when a business is sold in 2021, and in the future?
Comments