Martin J. Kallman

“For a sole proprietorship, the business income and expenses are reported on Schedule C of the owner's personal tax return, Form 1040. The sole proprietor pays taxes on the net income from the business as personal income.”
― Martin J. Kallman, Small Business Taxes: The Most Complete and Updated Guide with Tips and Tax Loopholes You Need to Know to Avoid IRS Penalties and Save Money

“If you purchased a building for $200,000 but were eligible to depreciate $5,000 of its value, you would effectively pay just $195,000. If you take depreciation deductions and then sell the property, the $5,000 will be used to pay back those costs. A 25% tax is applied to the recouped funds. If the building were sold for $210,000, the net gain would be $15,000. However, $5,000 of that total would be considered recoupment of the tax break. A maximum of 25% of the amount reclaimed is taxed as regular income. The remaining $10,000 in capital gain would be taxed at the zero, fifteen, or 20% rates described above.”
― Martin J. Kallman, Small Business Taxes: The Most Complete and Updated Guide with Tips and Tax Loopholes You Need to Know to Avoid IRS Penalties and Save Money