Report all income and only deduct legitimate expenses

You own a “cash business.” We understand your objective has been to keep your tax liability as low as possible, because no one works harder than you do for that dollar! To accomplish that objective a business wants to keep a very thin line between income and expenses.

In preparing ahead to sell, it is extremely important to report all income from all sources. Equally important is to avoid any “bloating” of expenses. Report only legitimate expenses. The goal is to now keep the gap wider between income and expenses, so that your true net is as high as possible. This net, or expendable cash, is what the potential buyer will be zeroing in on when assessing if there is enough to pay a mortgage payment as well as give them enough to eat 3 meals on! Not only the potential buyer, but the lender will be focusing on this as well. Yes, you will have a greater tax liability; however on the other hand you may very well command a higher sales price and a quicker sale by doing so and actually WINNING when looking at the big picture.