Fair market value

[aaronjumps]

I am interested to get you alls take on the fair market value of a business I bought. I finally have my LLC set up so now I am going to sell the business and equipment to the business so i can pay myself back for the purchase and get it under the LLC.

- 2014 Chevy 3500 w/ ~135k miles in great condition
- 2014 Hydramaster CDS 4.8 w/ ~ 4,300 hours
- RX20
- 400’ of vacuum and solution hose
- assorted chems
- TM4 CRB
- Prochem quad jet wand
- Zipper (straight manifold)
- Tile spinner
- all the other assorted tools, crevice tool, stair tool, upholstery tool, ect
- 15 air movers
- 5 large dehumidifiers
- 6 month old TOPS Phoenix

I got a smoking deal when I acquired it all, but think that it would be best to charge my business fair market value.

Thoughts?

 

[hogjowl]

Yes

 

[Mikey P]

You forgot the most important part , the customer database and how many legal contracts with commercial businesses

 

[Kenny Hayes]

CPA.

 

[SamIam]

I am interested to get you alls take on the fair market value of a business I bought. I finally have my LLC set up so now I am going to sell the business and equipment to the business so i can pay myself back for the purchase and get it under the LLC.

- 2014 Chevy 3500 w/ ~135k miles in great condition
- 2014 Hydramaster CDS 4.8 w/ ~ 4,300 hours
- RX20
- 400’ of vacuum and solution hose
- assorted chems
- TM4 CRB
- Prochem quad jet wand
- Zipper (straight manifold)
- Tile spinner
- all the other assorted tools, crevice tool, stair tool, upholstery tool, ect
- 15 air movers
- 5 large dehumidifiers
- 6 month old TOPS Phoenix

I got a smoking deal when I acquired it all, but think that it would be best to charge my business fair market value.

Thoughts?

Wow didn't know.mikey was selling nice

 

[Meter Maid]

The Yoda reply:

Putting effort into evading taxes he is.

Good prison sex it is.

I’m in W Virginia, sorry if my English is off.

Truth is I have no idea what the hell you’re talking about.

 

[Nomad74]

Ask Matt

 

[Kenny Hayes]

IRS don’t care what Mikeyboard gurus think the value is. I get what he’s trying to get to. A discussion with a CPA would be more beneficial.

 

[Trip Moses]

Unless you paid for it with a business checking account or a business loan your write off will be difficult

 

[steve_64]

Unless you paid for it with a business checking account or a business loan your write off will be difficult

He's going to repurchase it through his business. Buy it from himself at a mark up.

 

[sassyotto]

What am I missing? If the LLC buys the business, then he pays personal income tax on the income, but gets a write off on the LLC side. Whats the benefit?

Sounds fishy and maybe a red flag? What makes it worth it?

 

[aaronjumps]

What am I missing? If the LLC buys the business, then he pays personal income tax on the income, but gets a write off on the LLC side. Whats the benefit?

Sounds fishy and maybe a red flag? What makes it worth it?

It is my understanding that the LLC has to own the equipment for liability purposes. If I hit someone with the van and they sue my personal assets are likely at risk because I am mingling business and personal assets, I mean at this point it is my personal van.

It would muddy the corporate veil more if I were to try to take depreciation on my equipment that I use for the work with the business.

 

[aaronjumps]

He's going to repurchase it through his business. Buy it from himself at a mark up.

Exactly.

 

[aaronjumps]

IRS don’t care what Mikeyboard gurus think the value is. I get what he’s trying to get to. A discussion with a CPA would be more beneficial.

Actually there is a reasonable chance that I could use a consensus of “Mikeysboard gurus” to set a FMV. At least it would be a good place to start. As everyone here knows, it is a fairly unique asset and therefore difficult to price, the opinions of a hand full of old heads could be valuable.

 

[hogjowl]

Naw
I don’t think so

 

[FB7777]

What am I missing? If the LLC buys the business, then he pays personal income tax on the income, but gets a write off on the LLC side. Whats the benefit?

Sounds fishy and maybe a red flag? What makes it worth it?

Exactly …

How this isn’t obvious is alarming


Seek professional advice as it pertains to accounting principles

What you don’t know will likely get you into trouble …

 

[Nomad74]

- 2014 Chevy 3500 w/ ~135k miles in great condition
- 2014 Hydramaster CDS 4.8 w/ ~ 4,300 hours
- RX20
- 400’ of vacuum and solution hose
- assorted chems
- TM4 CRB
- Prochem quad jet wand
- Zipper (straight manifold)
- Tile spinner
- all the other assorted tools, crevice tool, stair tool, upholstery tool, ect
- 15 air movers
- 5 large dehumidifiers
- 6 month old TOPS Phoenix


I was going to try and figure it all out for you, but then it seemed like too much work. So I'm going back to enjoying my Velveeta Shells and Cheese with fried Spam mixed in.

 

[Nomad74]

I am interested to get you alls take on the fair market value of a business I bought. I finally have my LLC set up so now I am going to sell the business and equipment to the business so i can pay myself back for the purchase and get it under the LLC.

- 2014 Chevy 3500 w/ ~135k miles in great condition
- 2014 Hydramaster CDS 4.8 w/ ~ 4,300 hours
- RX20
- 400’ of vacuum and solution hose
- assorted chems
- TM4 CRB
- Prochem quad jet wand
- Zipper (straight manifold)
- Tile spinner
- all the other assorted tools, crevice tool, stair tool, upholstery tool, ect
- 15 air movers
- 5 large dehumidifiers
- 6 month old TOPS Phoenix

I got a smoking deal when I acquired it all, but think that it would be best to charge my business fair market value.

Thoughts?

I'll buy the Phoenix off you. Shipping to 96002

 

[hogjowl]

That actually sounds good

 

[BIG WOOD]

You forgot the most important part , the customer database and how many legal contracts with commercial businesses

That information helps justify how many times to multiply the sellers discretionary 3 year earning average by before you add in the value of the equipment listed above

If the database is strong and there's several legal contracts, he can multiply that up to 3-4 times due to the business being low risk

If theres' no database of customers, and no legal contracts, then you just go by the 3year average and not multiply it

 

[sassyotto]

If the database is strong and there's several legal contracts, he can multiply that up to 3-4 times due to the business being low risk

in real life do you really think you could do that given that if I had to start from scratch I could learn everything online (or worse take a couple courses) and save myself a bunch of money.

I know several cleaners that have tried to sell their businesses (O/O) and had no takers. Its actually easier to start from scratch and build your own following.

And we are talking carpet cleaners here, you know, the ones that complain that prices for equipment and supplies are too high.

 

[BIG WOOD]

That information helps justify how many times to multiply the sellers discretionary 3 year earning average by before you add in the value of the equipment listed above

If the database is strong and there's several legal contracts, he can multiply that up to 3-4 times due to the business being low risk

If theres' no database of customers, and no legal contracts, then you just go by the 3year average and not multiply it

in real life do you really think you could do that given that if I had to start from scratch I could learn everything online (or worse take a couple courses) and save myself a bunch of money.

I know several cleaners that have tried to sell their businesses (O/O) and had no takers. Its actually easier to start from scratch and build your own following.

And we are talking carpet cleaners here, you know, the ones that complain that prices for equipment and supplies are too high.

That comment I posted cones from the mouths of 2 different business broker companies who get that formula through the SBA that defies the value to be able to know how much to allow a business loan.

The reason your several o/o businesses probably couldn’t sell could be several factors that made their businesses undesirable as to them not developing a brand to be desireable to a buyer