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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > STCG tax on recent partnership
Expert: John Kirk, CPA
Date: 9/15/2008
Subject: STCG tax on recent partnership
Question
QUESTION: After working for 3 years for a firm, I was made partner this past July, 2008.
They are now discussing the sale of the company which may close in March,
2009. As an equal equity partner in the group I wonder if I will be charged at
a "short term capital gains rate" on the sale of my share of the company? If
this is the case, is there any way that I can avoid paying this rate, or defer
acceptance of the proceeds from the sale?
ANSWER: Not if you sign the agreement and the closing occurs prior to July 2009.
John
---------- FOLLOW-UP ----------
QUESTION: so is it possible that I could NOT sign the agreement and then make
arrangements with the buyers to sign it on my anniversary date and take
possession of the proceeds at that time?...even if all of the other partners
signed on the march closing date?
Answer
It would depend on state law whether the partnership is dissolved. If so, you are out of luck. Are you going to be a partner in the new firm?, if so you may be able to get tax free treatment in exchange for your partnership interest.
John Kirk, CPA
www.johnkirkcpa.com
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