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Author: jumpie Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 15349  
Subject: Re: Buying a business as an investment Date: 6/7/2012 6:44 PM
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>> It's absentee, so time isn't an issue.
>
> Then I'm back to the question of why does the owner want to sell if
> there truly is an expectation that the business will return 30%
> pre-tax going forward, since it would only take him a little over
> 3 years to recover the amount he could get from a sale? But if he's
> your friend and it seems reasonable to you, then I guess that's
> your call.

I already commented on this: first, I find that this appears to be standard pricing for buying a small business, second I understand and trust my friend's reasons. If you have additional input in reply to my thoughts in this regard, please do respond, but repeating yourself isn't helpful (with due respect).

> For the 2011 1040, taxable interest ends up on line 8a of the 1040,
> and tax-exempt interest ends up on line 8b of the 1040. Taxable
> interest is added to your income, and tax exempt interest doesn't.
>
> However, there are also 'various rates' that apply to dividends.
> There are 'qualified' divdends that are currently taxed at a maximum
> of 15%. All dividends end up on line 9a of the 1040, but then you put
> any qualified dividends on line 9b.
>
> Then, on line 44 of the 2011 1040, when calculating the tax on your
> taxable income, you will either fill out a 'Schedule D Tax Worksheet'
> or a Qualified Dividends and Capital Gains Tax Worksheet' where the
> lower rates are applied to capital gains and qualified dividends, as
> appropriate.

OK, I understand. Obviously, I haven't had to do that before. THANK YOU for pointing it out!!!
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