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Corporate Buy Out
Sent to General Experts September 15 02:18 PM

Back to question #1, the money being paid to me is part of a 5% ownership in a family business. I nver truly bought stock from my grandfather, rather I inherited my shares. Is it possible to just pay 15% of the total ($44,000.00) seeing my grandfather is dead and I worked in the business for over twenty years and I don't have a true value of share actually bought?

Customer (name blocked for privacy)
Status:  Closed   Value: $8
Answer
September 15 3:27 PM (1 hour and 9 minutes and 11 seconds later)
         
ACCEPTEDCheck Mark

You may pay 15% on $44,000.- IRS will be glad to have these money - $6600 plus California taxes. This would be based on assumption that your basis is zero. Don't forget that you will have taxes in the coming years as you will receive additional payments.

Establishing the basis will reduce your taxable gain. Thus as your share of the business was inherited - you will have step-up basis that is the fair market value of th e business at the time your grandfather died. I understand that it is hard to establish such value since over twenty years past over, but it definitely not zero and it would be beneficial for you.



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Lev -- Money-Tax,Investment,Collectibles100% Positive Feedback on 122 General Accepts
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