To begin selling your business assets, create a spreadsheet you can use to inventory all of the company’s assets, with columns for financial information and a description of each item. [4]

How does selling a business organized as a C corporation work?

The “C” corporation has no profit on the sale and the proceeds are distributed to the seller as a dividend. There is only one level of tax to the seller. Alternatively, if we have a “stock” sale for the same price as the asset sale, there is also only one level of tax to the seller. Truly, the buyer and seller end up in the same spot either way.

Is the purchased customer list an intangible asset at all?

The short answer is – YES, in the circumstances described in the question, you actually CAN capitalize the subscriber information – in other words – the customer list. Why? Let’s split this issue into 2 separate questions: Is the purchased customer list an intangible asset at all? Can we capitalize that intangible asset?

What are the assets of a C corporation?

The only other meaningful asset of the “C” corporation is inventory. (For those who “drop ship,” you can disregard this part of the discussion.) A business can’t depreciate inventory. As such, there is no meaningful difference to the buyer or the seller between a “stock” sale and an “asset” sale. There’s no reset of depreciable basis for the buyer.

How to determine which assets can be sold?

Once you’ve entered all of the financial information in your spreadsheet, you’re in a good position to determine which assets can be sold and which the business needs to keep. If you’re closing your business and liquidating all assets, essentially all assets are salable and you can skip this step.

What happens if you don’t sell your assets?

Typically, if you’re not liquidating your business you don’t want to give the appearance that you are. Selling significant assets could give that impression and make your clients or customers feel less secure about continuing to give you their business.

When is it time to sell your assets?

For example, if you have three computers, two of which are more than five years old, you probably want to sell those old computers and raise some cash to replace them with newer, more efficient machines that will be under warranty. Check your tax basis.