Going Out of Business
One day I had all I could take with the state sales tax folks (misapplied my tax payments again!) and I applied to teach science in middle school (BA in Biology) and got the job. It's something I've always thought I'd like and so far (2.5 years of it) I really like it. I have one problem - the shop just sits. I do just enough work to cover the monthly bills, about 1K a month. I rent the space, keep the insurance, etc.
I have all the tools including a panel saw, CNC, etc. I need or want. I looked at putting it in storage but the costs are not that different because I have so much stuff. I don't want to sell the parts off individually because then I can't work out of the shop. I would like to sell the equipment as package deal. When I think of the 1K/month I could put into a Roth IRA, it seems silly to keep going on as I have been.
What are my options? Any help or suggestions would be appreciated.
I work with a designer in Miami Beach that just bought out a small acrylic shop to add to her vertical operation and she kept the one employee. The owner wanted to retire and she saw the potential as she herself was a regular purchaser of his. My shop is in Ft. Lauderdale and there are still shops opening up here and they are often looking for well-kept used machinery.
From contributor F:
There are a few things to keep in mind regarding the IRS when selling your shop or equipment. If you took depreciation on the machines, you will have to recapture that portion that you realize back on the sale. You probably knew that. Also, if you just close it as a business but want to keep it to play around with, you will also have to recapture the depreciation.
If you want to do an owner carryback financing to a buyer, you will have to claim the full amount of recaptured depreciation the first year of the sale. This could easily be more than your cash flow from the buyer the first year. The IRS can cross-match your 941's and Schedule C's to find out if you are out of business but have not reported the recapture. I am in the same spot with my shop and got a jolt when I talked with my accountant.
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