Sale of business

[Looney1966]

I have a blog business and want to sell it and was told that I will have to pay capital gains on the sale of it.  It is a Sole prop that I started. I was told that it is worth approximately 150K(based on an evaluation I had done) and I started it from nothing and all assets, which are few, were written off each year.  If I sell it for 225K, is that entire amount a gain?  Is my goodwill or me building up the business and clients it worth anything to bring down the gain?

[Anonymous_]

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@Looney1966 wrote:

Is my goodwill or me building up the business and clients it worth anything to bring down the gain?

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No. The sale of goodwill that, essentially, you created would have a zero basis and anything received above $0 would be capital gain (long-term if more than one year).

See https://www.thetaxadviser.com/issues/2015/apr/tax-clinic-07.html

[Looney1966]

Yes, i started this in 2012, so you are saying that the entire $22K that I get is 100% long term capital gain. Correct?

[Anonymous_]

The entire sale price would be long-term capital gain.

[Looney1966]

Can my valuation be used for anything?

[Anonymous_]

No, unfortunately. The valuation is nothing more than that; an estimate of what the business is worth.

Your basis is $0 so anything you receive above that would be long-term capital gain.