Kit building, selling, profit and taxes
I'm brand new to this whole concept of kit building then selling, profiting and paying taxes on the profits. Believe me when I say I'd rather not even consider any of this and just order my kit begin my build and worry about the taxes and such later. So please let me just ask away and then sit back and listen.
First lets start with this legitimate question. If I buy a top of the line EX3 it's gonna run me around $215,000 for the entire kit. I'm close enough to Yakima so I can pick up everything in my enclosed trailer so shipping expenses aren't an issue. Now we need to add sales tax to the purchase at say 9 percent which is $19350 so now I've invested $234,350 for my kit. I have a nice heated shop to work out of for the build and a reasonable set of tools to work with. I have a high quality rivet puller but need to purchase a squeeze and not sure what else. If I do a real good job building the plane and it looks as good as some of the EX3s I saw at CubFest I'll take it to a broker and sell it for $325,000. the broker gets 6% or $19,500 to make that sale so $325,000 minus 6% is $305,500 minus the$234,350 leaves me with $71,150. Is my math working or am I way out in left field? Somewhere in there I needed some more homeowners insurance I'm assuming to protect my $234,350 investment in case it's stolen or my shop burns down. This would be a fair additional expense right? So that comes out of the $71,150. Now at some point Uncle Sam is going to know I made $71,150 through out the build year so I have to pay him off. Whats the best way to do that? Capital gains, take wages and pay income tax? I'm asking because I've never done a venture like this and many of you have done this numerous times so any help would be appreciated. Thanks
Mike
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Originally Posted by JDFRO
