Tax Law (Questions About Taxes)/Tax on business

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Question
I need some help relating to business stock tax. The owner of the company that I have ran for the past 10 years wants to GIVE me his stock in the company. If he were to give me 10% would I have to pay some tax on it. The owner is estimating the business is worth 3 million.

Also if the owner can not give the stock to me, he is thinking that he will stock receiving a pay check form the company. Give me his paycheck and I would pay him for the stock.

Answer
You use the word GIVE, and giving can incur a Gift Tax. You can check the IRS site on how that would apply.

There are tax implications, some immediate, and some deferred.  If you are looking for the most advantageous way to make the deal then I'll need a lot more details.

The owner can quit taking income. And you could get a raise, that is taxable and does not make you an owner. If you get a raise and then you use that income to buy the stock that'll probably be the most expensive way to deal with this transaction.

I'll help you get the best solution.

Call me.

Richard Fritzler
The Business Designers
1 877-627-7761  

Tax Law (Questions About Taxes)

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Richard Fritzler

Expertise

Specializing in Business and Corporate taxation. Comparing the advantages and requirements of different business entities, such as Sub-S Corporations, LLC`s, Partnerships (Both Limited and General), Doing Business as a Sole Proprietor, or Using a C-Corporation. Issues regarding K-1 distributions, 1040, schedule C, 1120, 1120s. Are you considering domiciling a Corporation in a low tax state? I can review the benefits and misinformation that exists.

Experience

I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

Organizations
National Small Business Owners Association.
Publications
Contributing author to "The Corporate Standard Newsletter".


Publications
Contributing author to "The Corporate Standard Newsletter".
Ezinearticles.com articlesbase.com

Education/Credentials
I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

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