When you buy a business, you have much to consider.
To start with, you need to consider the type of entity that owns the business now and the type of entity you will use to operate the business. On top of that, every asset of the business you are going to buy impacts your tax results.
Let me suggest that you purchase the assets of the business rather than an ownership interest, for two reasons:
Forming a business partnership is usually tax-free. Of course, this is tax law, so you must meet the basic requirements for a tax-free formation, and you need to avoid the situations that cause you to owe taxes on the transfer of property.
Requirements to Qualify
To qualify for tax-free creation of a partnership, you must exchange property for a partnership interest.
Overall, the partnership rules are extremely fl...