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Loren, Attorney
Category: Business Law
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Experience:  30 years experience representing clients .
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My mother is partners in an LLC in which she currently wants

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My mother is partners in an LLC in which she currently wants to withdraw from. The LLC is afraid to desolve to Tenants in Common in fear that my mother will not vote in favor with the rest of the partners regarding a future sale of property. They have offered to give a promissary stating they will buy her out at her percentage upon sale of property. Doesn't that make her liable for taxes and not able to roll over to another investment?
Submitted: 7 years ago.
Category: Business Law
Expert:  Loren replied 7 years ago.
As an llc member, any income or loss would be stated in her annual K1 and reported on her tax return.

Buying out her interest would subject her to capital gains. She may be able to defer the capital gains taxes by setting up a 1031 exchange. However, this is not something she can do herself and requires an attorney or CPA to assist in accomplishing the exchange so that it is in accordance the the tax code and applicable revenue rulings.

Good luck. I hope this is helpful
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