44: The Real Cost of Not Consulting Experts - A Tax Horror Story

Smarten Up! The Tax and Business Podcast

Ever thought about cutting corners to save a little on business advice? This cautionary tale might make you think twice.

In today’s episode, Sally Preston takes us through a jaw-dropping story of a business owner who learned the hard way that skipping expert advice can have devastating consequences.

Bill, a landscaper turned business seller, believed he had set himself up for retirement with a $4 million business sale — only to realise after the dust settled that he'd net less than $500,000 due to poor tax planning.

If you're in business, this episode is a must-listen to avoid Bill's fate. Sally walks you through the intricate web of tax laws, asset sales, and division 7A loans. Learn the critical steps to take before selling a business and why paying for quality advice is never a bad investment.

Tune in as Sally unravels this nightmare of missed opportunities and how sound advice could have made all the difference.

In this episode of Smarten Up! The Tax and Business Podcast, you'll learn:

• A word of caution for those who think they can skip professional advice (00:08)
• Meet Bill & Ben — and find out what happens when Bill decides to buy out Ben (01:38)
• Why Bill’s practice of borrowing money from the business sets the stage for future disaster (03:03)
• Will Bill’s decision to sell the business without proper tax planning lead to huge missteps? (03:55)
• How failing to account for tax on equipment and financing reduced Bill’s windfall significantly (04:53)
• Mishandling capital gains tax on goodwill and intellectual property (08:39)
• The shocking aftermath: Bill is left with only $492,000! (11:43)
• How proper advice could have saved Bill over $1.1 million (18:00)
• The critical importance of expert advice when navigating large transactions and business sales (22:05)

Don’t be like Bill. If you’re thinking about selling your business or making a big financial move, invest in expert advice to avoid losing out on potentially life-changing sums of money. Take this lesson to heart: paying for good advice now will save you far more in the long run.

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