Tax Law (Questions About Taxes)/corporation sale

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Question
I currently own a c corporation which is owned by myself and my two sisters. The restaurant started in 1972 and was ran by my mother until her death in 2007. Me and my 2 siblings inherited the business in 2007.
I am going to get bought out by my sister on a straight stock sale for 850,000.
What kind of taxes will I pay on  this sale?
Are there any recommendations to minimize the amount of tax i will pay. My income is $40,000 per year.

Thank You

Answer
Ed,

Thanks for your question.

You will owe tax, at the capital gain rate, on your profit.  Your basis in the stock is the fair market value as of the date of your mother's death.

You may qualify for an exclusion of all or part of the gain as qualified small business stock.  This article explains the rules for this.  http://www.groco.com/readingroom/sec1202_gain.aspx

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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