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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Partnership Buyout
Expert: John Kirk, CPA
Date: 9/3/2008
Subject: Partnership Buyout
Question
Hello,
I currently own a business with 3 other partners. I am looking to buy out two of them to share ownership with just one other partner. How should this buyout be handled? Can I make the payments to buy out these partners through the business? Are there any tax concerns on my end? Thank you so much.
Answer
The buy out is reflected as a transaction between you and the other partners personally, it does not effect the business. After the buy out the capital accounts should be adjusted to reflect only the two remaining partners.
You should also check your State's laws regarding partnerships to see if your state allows the transfer of partnership interest and the reporting requirements for your state.
John Kirk, CPA
www.johnkirkcpa.com
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