Splitting the business can be complicated. This is why: say both businesses rely on certain key assets such as a facility that both the trucking company and tire business use.
In cases where splitting the business is difficult, most of the time people either sell the business outright and split the proceeds or calculate the total value of the business and give them their share of the business based on the calculation.
If the business can not operate separately, splitting the business is not a viable option, and you will have to either sell it or calculate a value and give the other party their share of the current net worth of the business. There are other options, but they are much more complicated and don't seem to fit your circumstances with you both wanting to go your separate ways.
There is NO company structure to avoid paying taxes unless you reduce the basis of the assets through say rapidly depreciating them until their value is not an issue.
For example, say you were giving away a truck that was part of the business transfer/sale that was set to decline in value to basically nothing in 5 years. Well if you expensed or decline the value of the truck to scrap value now by changing your depreciating method then the recipient could receive an asset that had little value to tax. And most likely your value has declined from the purchase date anyway.
You need to get an accountant involved in doing this to make sure you don't break any tax laws
, but it is legal to change your depreciation
method. You just want to correctly document this if it comes under scrutiny.
Yes, you are right if you transfer/sell the assets at your basis and that is what I see this as as a business sale at the cost you paid for it. You will not owe any federal taxes
but as for sales taxes
(see and http://dor.myflorida.com/dor/businesses/tax_clearance.html), but he is not paying for them
Avoiding taxes on this business sell is all about what you value the business assets at--Not what the company's ownership structure is
. There is no
company structure to avoid paying taxes on a sell when he is not paying for the assets--unless the value is quite low. See this as a refresher http://en.wikipedia.org/wiki/Gift_tax_in_the_United_States and http://www.justanswer.com/tax/0144q-avoid-taxes-when-selling-business.html
When a person doesn't pay for something it comes under a different tax category such as a gift, compensation
, legal settlement, etc all with their own tax laws.
Therefore, you fall into an issue where it looks like you are giving them a gift which is taxable above a certain amount. Or if you claim you are giving them compensation for services provided then there are some payroll taxes
associated with that.
Therefore, the key is valuing the assets as low as possible, or keeping you as the owner of all the assets and structuring the business that way. But it seems you want to separate yourself from this business on paper so that's not an option.
FYI: If he was a prior owner of some company assets before you tried to split the company you could get a simple contract from NOLO or somewhere and simply segregate what his ownership share was (truking company) and yours the tire company.
Keep in mind prior oral contracts between you and your ex can always later be formalized in a written contract. Then there would be NO change in ownership, so no tax implications. But I don't know what conversations you had in the past of course.
Please accept my answer unless my explanation needs clarification. And this is a very complicate, difficult question involving research on my end, so a bonus would be greatly appreciated ;-)