If I were to liquidate the assets of a business:
1.) Would I need to collect sales tax (I suspect I would)?
2.) Is there a capital gains tax on fully depreciated items (and is that over and above some salvage value)?
3.) How does one depreciate software, particulary expensive stuff that requires annual maintenance fees (I notice my property tax rendition says to not include it)?
Thank you for your input.
You are asking for legal advice relating to federal and state tax. You need to retain a tax accountant to handle the liquidation. Or else sell everything for cash.
Sorry, beatle. I had a response and forgot to post it.
1.) Would I need to collect sales tax (I suspect I would)?
This varies by state, but I think that in most cases used equipment (including office furniture, etc.) sold from a business that is not in the sales business is exempt from sales tax if the customer is also a business. So basically, if you sell your office furniture to Amalgamated Widget Co. or to the Acme Furniture Resale Company, collecting sales taxes is not a concern. If you sell the furniture at a beatle’s Movin’ On Up Tag Sale, you would.
2.) Is there a capital gains tax on fully depreciated items (and is that over and above some salvage value)?
In most cases, yes. If you have depreciated an asset to zero or to a salvage value, any proceeds you realize in excess of that amount is taxable.
3.) How does one depreciate software, particularly expensive stuff that requires annual maintenance fees (I notice my property tax rendition says to not include it)?
Haven’t the foggiest. Sorry.
Thanks, manny.
The software issue has even my CPA a bit trepiditious; he thinks we can presently get away with regarding it as software such ass Word or Excel, that the taxing authorities seem to have come to regard as consumable office supplies. At some point they’re liable to take the view that the 5 and 6 figure software licenses that require 4 and 5 figure annual maintenance fees are capital assets.