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Buying a retail business and owner wants me to pay for the change rooms he put in the space 3 years ago Is th

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Sam Desai
Los Angeles County, CA

Great Call.

Dec 24, 2014
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Thank-you. I am paying for inventory. I must take all his inventory (no negotiating) plus $15,000 for goodwill and $15,000 for store improvements. so I am have to walk away. Thanks again.

Dec 20, 2014
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The BAF Group LLC

Usually, you do not pay such things, out of pocket, as a Buyer. But in certain circumstances, there can be negotiated reimbursement. It depends on the totality of the deal. But, if he paid for it three years ago, he probably took most of the Expenses and charged it off to his Tax Returns. If he depreciated it over a number of years, you should only being paying for the amount not yet depreciated. For example, if the total cost was $25,000 and he depreciated it over a 5-year period in equal amounts, he would have been "reimbursed" by the Federal Government for $15,000 already. (3 years x $5,000 per year.) Therefore, you should only be negotiating over the last $10,000 that has not yet been deducted on his taxes. You should not have to pay that first $15,000, because in a sense, the IRS has already done that.

Dec 20, 2014

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