Seller of C corporation stock wants buyer to pay $1 for stock plus assume $1 million late accounts payable. As for reporting purposes, would the selling price of the stock be considered to be $1,000,001?
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Are the accounts payable the obligation of the C Corporation, or are these personal debts of the current stockholder?
Obligations of the C Corporation.
Then the stock price would be just one dollar because the accounts payable will stay inside the corporation when the stock is sold. All of the assets and liabilities stay inside a corporation when it is a stock sale rather than an asset sale. So for example, if the corporation has 1,000,001 worth of assets, and 1,000,000 worth of liabilities, then the net worth of the corporation is just a dollar. So if the stock sells for a dollar, the seller has realized a dollar for the stock and calculates his or her gain or loss by subtracting their basis in the stock (the amount originally paid for the stock). The buyer would have a basis of $1 in the newly purchased stock.
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