Revenue and Tax Question

[rcooke (Roy D. Cooke, Sr)]

@clawrenson

That’s good information Erik, however I caution do not mix business with personal. I was called on that by Canada Revenue years back and had to prove my mileage claim from job site to job site.

Just saying! Everyone needs to be careful.

On the selling the inspection business question - I have not heard of too many successful business sales for “big bucks” to retire on the home inspection front. Perhaps the best one can do is take on an associate to eventually take over the business and buy you out, or at least do a buy-out over several years. Again it depends on the business.

I know inspectors that have had banner years, but more recently followed by lucky to get 1 inspection a week scenarios. When it’s a sellers market and multiple offers are the norm with virtually no “conditions”, home inspections are removed. Remember real estate markets can fluctuate dramatically, even with the best of scenarios.

A well run well known company can be sold as a established successfully business .
A good inspector can instantly be making a reasonable return .
Work with the owner for a reasonable time (90) days ~) to meet many agents .
Worked for us . Selling price is confidential but was adequate .

I agree keep it completely clear of your personal assets .
Many years ago my accountant told me buy another car I don’t care how old it is just make sure it is clean drivable and insured .
This will be a lot easier over the years for the tax dept. knowing you have a business car and a personal car . Worked for us for about 40 years.

[sosborne1 (Steve Osborne, 70001310)]

I agree, if you’re claiming your home office as a deduction make sure it’s a separate structure with a separate outside entrance.

[rlewis5 (Roy Lewis, CERTIFIED MASTER INSPECTOR RETIRED)]

Pigs get feed…Hogs get butchered.

[mclark2 (Michael Clark, CMI)]

@sosborne1

I agree, if you’re claiming your home office as a deduction make sure it’s a separate structure with a separate outside entrance.

It just needs to be a room dedicated solely for the purpose of the home office.

The separate structure and outside entrance is not always feasible.

I’ve taken the home office deduction every year and haven’t been audited yet, but, like Frank, if they audit me I have everything I need to back my deductions up.

[prussell (Peter Russell, NH licence #57)]

David, don’t forget about retirement. Depending on your company structure you can make a contribution at the end of the year to lower your tax liability.

The home office is a great idea, my accountant has it set up where my company pays me 500/month for rent.

[sstanczyk (Stephen Stanczyk, WA License #221)]

@prussell

The home office is a great idea, my accountant has it set up where my company pays me 500/month for rent.

Is the $6k in business write off worth the $6k in non-taxed, personal income you have to declare? That becomes another business in and of itself.

[prussell (Peter Russell, NH licence #57)]

@sstanczyk

Is the $6k in business write off worth the $6k in non-taxed, personal income you have to declare? That becomes another business in and of itself.

Yes it is because its not taxed the same, no payroll tax. My company is structured as a C Corp and I receive a weekly paycheck

[lkage (Larry Kage, CMI)]

We considered something similar but decided it wasn’t worth the small deduction when we considered the taxes we would have to “pay back” when we sold our home had we been using a portion or percentage as a business deduction all along.

[jhagarty (Joseph Hagarty, CMI)]

@frotte

I always end up less than zero. I have a good accountant.

Exactly…