North Carolina business owners may be interested in learning about how capital gains are handled when a business is sold. Taxes on capital gains will come into play when a capital asset is sold; when a business is sold, capital assets are usually part of the sale.
Businesses use capital assets in order to make a profit. These assets can be held by a business in order to make investments or to use them for other purposes that will prove profitable to the business. It is common for property that the business owns to be considered capital assets.
Capital assets can include many things, like merchandise or inventory that would be sold to customers. It could also include intellectual property, like copyrights, patents and trademarks. Capital assets include depreciable property like vehicles and equipment that are used in the business. Other assets include investments, physical property that the business owns, and accounts receivable or notes receivable.
There are times when a business will sell specific assets. For example, a business may sell a company-owned vehicle, equipment or furniture. When a business sells these types of things, it is considered to be ordinary gain. These are reported to the IRS on a business tax return. When the business is sold as a package, the IRS will look at the sale in a different way. Each asset will be treated differently.
Other steps need to be taken when a corporation or a partnership is sold. Some business owners turn to a lawyer in order to get more information about buying and selling businesses. A lawyer may be able to provide information about the sale of a business, business transactions and tax information related to the sale of a business. The lawyer may be able to help file the appropriate paperwork and make sure that all paperwork is legally binding.