- quote -

If I had "equitable " ownership of the shares all these
years I might consider taking the capital gains view and
date my ownership accordingly. Unless it comes up you may
never have to defend a contrary view. Not if you take a
position in reliance upon tax or legal counsel you cut your
expose to any penalities way down--but not interest if it is
disallowed.

My position might be the company would not be paying me out
if it hadn't have had an equitable ownership of said shares.

As an aside it might make sense to ask the former majority
owner how his accontant treated the situation lest you open
up an unnecessary can of worms--then again don't ask
questions if you don't want the answer--think!

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I am in a peculiar situation (I think anyway!) and am hoping
someone could provide me some guidance. For the last five
years, I worked for a start-up computer company. I was
always treated as an owner of the company (10%) but the
company being rather small neglected to list me correctly as
an owner with the state (Louisiana). I was naive enough to
let this persist. Approximately one year ago, the company
was sold to a larger firm. A sum of cash was paid at the
closing and two subsequent payments were scheduled on an
"earn-out basis". I paid the capital gains tax on the first
portion of the money disbursed at the closing. This past
month I received my second disbursement. I understand that
to avoid penalty fees I should pay some or all of the CG
payment for 2003 next month. I would be more than happy to
do so but I am curious if I should be treating this as
capital gains. Since I was not an official owner (and
therefore not a party to the sale agreement), I am being
paid indirectly by the (former) majority owner. Should I
treat this as CG, income, or something entirely different?

Thank you!

JMR

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->