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Sample Sales Agreement
- Thread starter Buzzie8
- Start date
seattleguy
Member
DO you mean a P&S for real estate or something specific to car wash?
An agreement to sell/buy the entire business including real estate. The bank is looking for this on a deal that I am working on. It might need to be two separate agreements, one for the real estate and one for the business. I am going to talk to my attorney tomorrow but I thought I would try to get some input here first.
seattleguy
Member
When I bought my was, it was just the real estate P&S with a little language thrown in to cover transfer of the car wash assets. I bought from a lending institute (foreclosure) and I wasn't buying the business entity. If you are buying a company that owns the land and the business - that would be a different animal entirely.
Earl Weiss
Well-known member
You need to consult with your attorneys and accountants. They will factor in he following.
1. How will bifurcating the deal affect future real estate taxes and current transfer taxes.
2. How will bifurcating the deal affect mortgage financing.
3. How will bifurcating the deal affect future depreciation and past depreciation recapture tax impact.
4. How will allocations between various assets affect deprecition and income taxes.
5. How will any structure tie in to local regulations and restrictions.
6. what about a non compete?
7. What about representations and warranties that survive the closing.
8. Responisibility for any ordinance violations and monies owed that stay with the property.
9. Does the government impose Seller liability upon Buyer for monies owed unless clearnaces are obtained.
10. What Business structure(s) does the Buyer need to have. Corp? LLC? Both?
1. How will bifurcating the deal affect future real estate taxes and current transfer taxes.
2. How will bifurcating the deal affect mortgage financing.
3. How will bifurcating the deal affect future depreciation and past depreciation recapture tax impact.
4. How will allocations between various assets affect deprecition and income taxes.
5. How will any structure tie in to local regulations and restrictions.
6. what about a non compete?
7. What about representations and warranties that survive the closing.
8. Responisibility for any ordinance violations and monies owed that stay with the property.
9. Does the government impose Seller liability upon Buyer for monies owed unless clearnaces are obtained.
10. What Business structure(s) does the Buyer need to have. Corp? LLC? Both?
Thanks Bill,
Anything you have would be a good start. You can PM me with an attachment (if that is possible). I told my attorney that i would prefer to give him something that might suffice and he could review it for the finishing touches.
Also thanks Earl... I will take all your points under consideration in drafting the sales agreement.
seattleguy
Member
Talk to your attorney about valuing the equipment and structure as high as possible to aid in depreciation expense vs land value.
Earl Weiss
Well-known member
Where should I send the bill?
pitzerwm
Active member
Seattle, that advice is good for you the seller, but the buyer might have to pay upfront a lot of sales tax on that equipment purchase which he isn't going to like. That is why I use the NC & Goodwill, they don't pay tax on them and they can write it off as they would with the equipment, and you pay capital gains rate on it.
seattleguy
Member
Good point.
pitzerwm
Active member
There is another tax treatment, that I have used. If your wash/business is in a corp (or you could put it in a corp) and the buyer has a corp, his corp buys your corp. He needs to keep it separate for one year, then he "merges" them. At that point he can use the total price that he paid for your corp as his basis, and start depreciating the "wash" from that basis. (Land and building normally is in your name and you have been renting it to the corp, which is sold separately) No sales tax to the state, at least not in WA. You don't have recapture, you pay as capital gains rate.
A lot of CPAs do not know about this and I once had to pay one $600 for him to "research this for his satisfaction". Of course, I not only fired him, but I talked the 20 clients that I had taken to him to also leave.
A lot of CPAs do not know about this and I once had to pay one $600 for him to "research this for his satisfaction". Of course, I not only fired him, but I talked the 20 clients that I had taken to him to also leave.
Can you send these documents to me as well please.
Earl Weiss
Well-known member
Speak t your accountant as well. There may be a reason to Bifurcate agreements Between busiess and real estate ad sometimes the Buyer and Seller can have opposing needs on how this is structured.
jfmoran
Active member
Just an FYI, this thread is 10 years old, Bill used to own this site, pretty sure he's retired now
LOL!! Bill Pitzer is looong gone. The best thing you can do is talk to an attorney and your accountant
Oh shoot. Thanks anyways guys
Just noticed ghat I appreciate the responses though
I.B. Washincars
Car Washer Emeritus
He actually posted something on FaceBook the other day. First I had heard from him in years.
Do you mind chatting about your arrangement? I am in the beginning stages of trying to buy a wash and want to discuss options with you and see some sample documents.
