Taxes: Truth or Myth

[DNWizardX9]

A friend of mine that owns many of the top webmaster sites on the net told me if you sell a site and buy another site within the same year you don't pay taxes on the amount you got from the old site when selling it as long as you put it towards buying a new site that may be more expensive or the same price.

True or false? Or is there something similar?

 

[jberryhilljberryhill is verified member.]

Any business may deduct ordinary expenses from gross revenue. If this is something you intend to consider, then you should certainly obtain any basic material on the subject of tax considerations for businesses.

http://www.toolkit.cch.com/text/P07_2500.asp

 

[actnow]

Jeff,

False. The net income is taxable from the first transaction. But, it can be offset by
expenses incurred for the creation of the second site.

 

[DNWizardX9]

thanks for the tips

 

[jberryhilljberryhill is verified member.]

"But, it can be offset by expenses incurred for the creation of the second site."

Which, depending on the nature of the business, might or might not be a capital expense to be spread over more than one tax year. If this is really an issue for you, then you need to seek the advice of an accountant or attorney who can unravel the mysteries of the tax code.