09-05-2005, 03:33 AM
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 Re: s corp shares transfer ownership - quote - > I operate a S Corp. WE have a total of 10000 shares. my
1) It would probably be wise to consult a business valuation> parents own 5000 shares, my uncle owns 2500 shares and I own > 2500 shares. My parents want to sell me their shares in the > S Corp. How do I determine the value of those shares and how > is that usually recorded? Also, if they sell me the shares > now, then is it true that all income after that date will be > part of my K1 ? Then on my K1, when it lists percentage of > ownership, would that be current or before my purchase? > Thanks > This year I am in the high tax bracket, what can I purchase > that have top of the line deductions? I remember last year > there was the huge and heavy SUV.. anything this year? specialist to properly value the corporation. 2) You have an 2 options for reporting income on your K-1 in the year of the sale: a) The income gets prorated per share per day. Your ownership % at the end of the year would a number betweeen 25% and 75% depending on what day the sale took place. b) Make an election under IRC Section 1377(a)(2) to "close the books" and treat one year as two separate tax years. For example, the sale takes place on 3/30/05.... You would get 25% of the income through 3/30/05. Then, from 4/1/05 through 12/31/05 you would get 75% of the income. Josh << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#-1
08-29-2005, 02:26 PM
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| s corp shares transfer ownership I operate a S Corp. WE have a total of 10000 shares. my parents own 5000 shares, my uncle owns 2500 shares and I own 2500 shares. My parents want to sell me their shares in the S Corp. How do I determine the value of those shares and how is that usually recorded? Also, if they sell me the shares now, then is it true that all income after that date will be part of my K1 ? Then on my K1, when it lists percentage of ownership, would that be current or before my purchase? Thanks This year I am in the high tax bracket, what can I purchase that have top of the line deductions? I remember last year there was the huge and heavy SUV.. anything this year? << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
| Tags |
| corp, ownership, shares, transfer |
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