Forum Moderators: LifeinAsia
I have my own personal website that I had for about 5 months, that I just sold for $200,000.
The buyer is located overseas, and I am located in California. The website was a personal website where I was making money by putting ads on the page, and then received a great offer, so I sold it off.
Question is, since the buyer is overseas, I'm in CA, how much taxes should I expect to pay on that $200,000 sale? I've heard some say 25% other 38% and some others 59%, so I'm confused.
I will be seeing a CPA probably in about a month or so, but does anyone here have an idea about what I should plan on giving away to big brother?
Thanks for your time!
I assume you're a 1040 filer and this is going on your personal return? (e.g. you're not doing business as a corporation or partnership.) If you're planning to invest your profits into other business activities, spend as much of it as you possibly can before the end of the year. Those business expenses will offset the income on your Schedule C, reducing your tax liability substantially. As has been mentioned, you can also shelter a portion of the remainder by putting it into a SEP-IRA. Whatever's left will likely be taxed as normal income, plus 15% self-employment tax (plus state income tax). Depending on what tax bracket you're in, that can approach 40-50% in total taxes. The sale might qualify as a captial gain, but I wouldn't count on it.
But really, see the CPA sooner rather than later.
I hope you do not mind to tell what was the website name? I do not know the policy (lazy to read TOS :), but hope you can just post a name without a link, can you?
It would be very interesting to analyze your new business model, cause I am working my this subject right now.
Thanks a lot in advance.
You can open a business in a country that has no taxes and transfer you money there. Then use that company to fund your new venture. It could count as an investment. Maybe you wouldn't have to pay taxes then?
can you post the link to your old site.
or at least e-mail it, after reading through 4 pages of posts i think i deserve to see it :-)
Thanks for the advice. I have spoken to a CPA, and it looks like I will be paying 45% taxes on the sale... ouch. However I will be investing 50K into another market, so that should help lower it some.
And for those who say that have to see the site to believe me, well sorry I won't tell you, and frankly I can care less if you believe me or not :=) The point of this post was to ask about tax advice, not debate over the site, income, or to give away a trade secret.
Also, maybe the poster means Rupees or peanuts or some other currency, not dollars.
frankly I can care less if you believe me or not :=)
Good for you.
All the naysayers here, I can vouch that this CAN be done (I don't know Dark Angel, or his site, so before you ask . . . .)
I have a friend who was working at a crap position being paid crap pay and discovered a niche that he could fill. He quit his job, moved into a trailer on his dad's property, and began cranking out content.
No more than 6 months later and this guy is pulling in over 6K a month. That's 6,000 USD and climbing. Two of the largest software companies (intentionally vague, and not MS, at least **not yet**) link to his site. Google thmeselves have contacted him to assist in optimizing his site for him. Google never contacts anyone! The guy is a superstar, and he is going to be a millionaire by next year.
It's just like anything else, find the good idea, work your ass off and it WILL pay off. I have no doubts D.A. has sold this site, and you all can too, if you have the ideas and put in the work.
Maybe me too. Someday. :-)
Well my situation was kind of similiar...
I used to work graveyards for a security firm for $12/hour. One day I was browsing a website, thought that it sucked, so I paid someone to clone it and change around text for $25.
A week later, the site starting making $20 per day which I thought was totally awesome, so I spent another $40 to make my site even better. Almost every week my site would double in daily income.
By month #1 I was making about $100 per DAY from my site, Month #2 was about $150 per DAY, Month #3 $750 per DAY, Month #4 $1,500 per DAY! Yeap that is right by month #4, my site was making $45,000/Month, minus expenses, about $43,000 per month.
And the absolute greatest part of all of this...is that the site took ZERO work to keep running. I did NOT have to ship anything, bill anyone, do anything, update content...I did absolutely nothing at all! My site grew to about 110,000 UNIQUES per day and 1,200,000 Pageviews per day it was that popular.
So I wanted to make some quick cash for another market, so I sold the site for a pretty low amount of $200,000. It was probably worth allot more, but since it was only 4 months old, that probably hurts it. I mean the site makes $45,000 per month doing absolutely nothing at all...literally nothing!
Anyways, I've just been worring about the taxes part. Some people I have spoken to say 40-50% taxes, the IRS website says 33%, so I have to speak to a CPA to be sure.
Plus, you could reinvest that money in your new idea and pay no taxes on it...
You could have had your new venture paid with free money, and still owned the old one pulling in big money while you do nothing. (as long as it doesn't crash and burn, which is probably a risk and why you wanted to sell it at a fire sale price)
I understand that I sold it for a pretty low amount. But I had a few good reasons...
- Needed a large lump sum of cash fast
- Market getting too saturated
But that is getting off topic again...
What I don't get is that you won't let anyone know the URL.
1. You don't own it anymore, so it won't effect you if we see it.
2. You said yourself that it's a saturated market now, which generally means the idea is shot for other people to milk.
3. Essentially, you ripped someone else's website
Another thing, if you didn't want anyone to see it or ask for the URL then why have a subject title of "Just sold my website for $200,000", that is attention grabbing. It would have been much more effective to have a subject like "About to sell my website, got some tax concerns" and then asked people opinions on different tax brackets.
PM me the URL will ya!
:)
There is simply no more reasons to hide the URL. ANYWAY the website is ONLINE, free for everyone to access it, right? So why to hide it then?
So, my verdict is that Dark_Angel is someone I would not trust or someone who is not honest (come on, first he intriques pleople and than runs away to bushes).
Please, correct me if I am wrong.
P.S. the topic is different of course, but I am trying to find out some info and real life examples of small online-business websites.
Like I've said before, I can frankly care less if you believe me or not. I did NOT start this thread to discuss the website of business model. I started it to discuess topics hence the "How much taxes should I expect to pay?" put in the subtitle.
I'm not posting the URL for a few reasons...
- Last time I posted the URL on a public forum, there were 85 clone sites put up within 2 weeks. Everyone thinks that the idea is so great, and they all try to clone the site.
- I still have a financial interest in the market, and business venture, so by posting the URL I may compromise that interest.
Now back on topic....
This is what I am going off of...
[irs.gov...]
Anyone, who is pro in online business, correct me if I am wrong, but I think one could try to find a niche website which is made non-professionally, then to make clone of it content, rewrite it a bit, make nice design, outlook, work on inbound links and etc. And Is that so, that very soon your new niche website will be listed in SEs because there is simply no competition in the niche?
I've recently found out (by a lot of reading) that the best way to escape big IRS taxes is to invest your earnings and capital gains in real estate- you supposedly get some big advantages and less tax that way- reason being that the Gov encourages all of us to be property owners because they aren't good at it (projects, slums).
Suggest you check out a book called Loopholes- I'm reading it right now- here's the full title: Loopholes of the Rich : How the Rich Legally Make More Money and Pay Less Tax
So the idea is most people think you make a lot of money by earning- but earning is where you get nailed in taxes- real estate is better for this...
You guys should just drop the idea. I'm not posting the URL for a reason, and as I said this isn't a matter of if you believe me or not, but is a matter of taxes. So by calling me a liar and an idiot, doesn't phaze me, and you are free to do as you please. I'm not posting the URL because I have a fiancial interest into the market site.
Please say on topic...
Also if you can't find out what the site is from the info given in the thread then you're a bit of a dumb monkey.
Why...
- I'm getting 20+ pms per day from users saying "I've been trying so hard to make money online, and I would like for you to help me do this" and other lame excuses that I've been given from people who think I'm going to tell them how to make money.
- On a webmaster forum is probably the WORST place to post the income and url to a site... especially because half of you will go out and try to clone the site in desperate hopes to make the same kind of money.
Message#37 by Dark_Angel - 12:24 pm on Oct 13, 2005...I have spoken to a CPA, and it looks like I will be paying 45% taxes on the sale... ouch.
Message#40 by Dark_Angel - 1:47 pm on Oct 13, 2005...Some people I have spoken to say 40-50% taxes, the IRS website says 33%, so I have to speak to a CPA to be sure.
Huh?
woofwoof gosh I didn't care what the site was till you called me a "dumb monkey"
Would be nice if a mod could delete all the post asking for my sites url.
