Yes, they will charge you for depreciation claimed but not earned. Sent from my iPhone
> On Aug 22, 2020, at 12:35 PM, Matt Hoppes <mattli...@rivervalleyinternet.net> > wrote: > > > That doesn’t make any sense. What am I missing? > > If I pay $50,000 for a truck and depreciate over 5 years I take $10,000 per > year. > > Why would I need to pay back anything if I sell in year 2? > > Or are we saying if I write off the entire $50,000 on day one on something > you’d normally depreciate over 5 years and sell at year 2? > >>> On Aug 22, 2020, at 2:30 PM, ch...@wbmfg.com wrote: >>> >> >> They assume if you ever took depreciation for anything, it was used as an >> offset for income tax you would have paid. They want that back. I presume >> stuff you junked does not count. >> >> From: Ken Hohhof >> Sent: Saturday, August 22, 2020 12:04 PM >> To: 'AnimalFarm Microwave Users Group' >> Subject: Re: [AFMUG] Buying and selling ISP’s >> >> Any WISP that has been around for 10+ years has probably expensed or >> depreciated several times as much equipment as is currently active in their >> network. >> >> Do you have to identify which expensed or depreciated equipment is still in >> use and which went in the dumpster years ago? And how do they determine >> what the sale price is for the purpose of seeing if it exceeds the >> depreciated cost? Do they assume the entire sale price of the business was >> to acquire equipment? >> >> Seems like you would be taxed twice, first for capital gains, then for the >> expenses you used to offset revenue for tax purposes. >> >> I know most buyers prefer an asset sale to a stock sale, in case there are >> ghosts in the closets. But would a stock sale avoid this problem? Does it >> matter C Corp, S Corp or LLC? >> >> >> From: AF <af-boun...@af.afmug.com> On Behalf Of ch...@wbmfg.com >> Sent: Saturday, August 22, 2020 10:51 AM >> To: 'AnimalFarm Microwave Users Group' <af@af.afmug.com> >> Subject: Re: [AFMUG] Buying and selling ISP’s >> >> One concept that was new to me in my sale was depreciation recapture. If >> you fully expense or 179 expense or if your equipment is old enough to have >> fully depreciated, all the depreciation expense comes back to bite you in >> the ass. You will be taxed on it. >> >> From: Ken Hohhof >> Sent: Saturday, August 22, 2020 9:39 AM >> To: 'AnimalFarm Microwave Users Group' >> Subject: Re: [AFMUG] Buying and selling ISP’s >> >> That is very dependent on whether the business is being run as “milking the >> cash cow” or “reinvesting to grow the business”. Especially since section >> 179 allows a lot of capital purchases to be expensed in the first year. >> >> I suspect many WISP owners prefer to add staff and equipment and towers and >> customers, rather than declare profits and pay taxes. That doesn’t mean >> their businesses are worth less to a buyer. Back when I worked for >> corporate America, I remember around 1990 working for a public high tech >> company and at stockholder meetings the CEO would be asked why the company >> at every earnings statement would just break even or a little more. He >> would answer they were in business to grow, not to pay taxes. >> >> I am sometimes puzzled by competitors who seem to have crappy service, are >> hated by their customers, and have high churn. Then I realize they are >> milking the cash cow, spending as little as possible, and probably making as >> much or more profit as I am. In the case of big, crappy companies, they >> probably don’t sweat the churn because there are millions more suckers out >> there, you just need advertising to rope some of them in to replace the >> cancellations. Like when asked about Frontier, I describe them as the slum >> landlord of phone companies. >> >> >> From: AF <af-boun...@af.afmug.com> On Behalf Of Chuck McCown >> Sent: Saturday, August 22, 2020 10:02 AM >> To: AnimalFarm Microwave Users Group <af@af.afmug.com> >> Subject: Re: [AFMUG] Buying and selling ISP’s >> >> Whatever 5x your earnings are. Not sales or revenue or gross profit but >> bottom line earnings on your income statement/ pl. Your taxable income. >> >> Sent from my iPhone >> >> >> On Aug 22, 2020, at 8:16 AM, Mike Hammett <af...@ics-il.net> wrote: >> >> >> What does the revenue multiplier end up being, though? >> >> 5x EBIDTA / revenue gets you what, in purchases that have been made? >> >> >> >> ----- >> Mike Hammett >> Intelligent Computing Solutions >> >> Midwest Internet Exchange >> >> The Brothers WISP >> >> >> >> From: "Chuck McCown" <ch...@wbmfg.com> >> To: "AnimalFarm Microwave Users Group" <af@af.afmug.com> >> Sent: Friday, August 21, 2020 8:20:47 PM >> Subject: Re: [AFMUG] Buying and selling ISP’s >> >> 5 x ebidta >> Revenue multiples are of no value. >> >> Sent from my iPhone >> >> On Aug 21, 2020, at 5:30 PM, cjwstudios <cjwstud...@gmail.com> wrote: >> >> >> 1x annual revenue and hope the customers stay on >> >> On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes >> <mattli...@rivervalleyinternet.net> wrote: >> This is the issue I’ve always had when I’ve looked at buying an ISP. It >> always seems like a lot more money I would have to put out to buy then I >> could just build and take the customers if something is wrong with the >> current network. >> >> >> >> > On Aug 21, 2020, at 12:43 PM, Seth Mattinen <se...@rollernet.us> wrote: >> >> > >> >> > On 8/20/20 8:13 PM, Steve Jones wrote: >> >> >> I think you either buy or sell, isp isnt really a flip thing >> >> > >> >> > >> >> > There is/was someone in my part of the country buying up ISPs and trying >> > to package them all together as a flip. My ISP customers tell me it's far >> > easier to get the flipper's customers to cancel and switch than buy their >> > company. >> >> > >> >> > -- >> >> > AF mailing list >> >> > AF@af.afmug.com >> >> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> >> >> >> -- >> >> AF mailing list >> >> AF@af.afmug.com >> >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> >> -- >> AF mailing list >> AF@af.afmug.com >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> >> -- >> AF mailing list >> AF@af.afmug.com >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> >> -- >> AF mailing list >> AF@af.afmug.com >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> -- >> AF mailing list >> AF@af.afmug.com >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> -- >> AF mailing list >> AF@af.afmug.com >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> -- >> AF mailing list >> AF@af.afmug.com >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com > -- > AF mailing list > AF@af.afmug.com > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
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