I own a successful funeral business that is incorporated with 200 shares issued. I would like to transfer ownership to current employees. I have valued business as follows
1-THREE YEAR ADVERAGE EBIDT=325,000.00 X 4.5=1,462,500.00
2-FH REAL ESTATE 1,500,000.00
3-CARRAGE HOUSE REAL ESTATE 500,000.00
4-TOTAL PURCHASE PRICE 3,500,000.00
I WILL FINANCE THE DEAL FOR 15 YEARS AT INTEREST RATE
OF 0.50 FOR MONTHLY PAYMENT OF 20,186.77
I WILL TRANSFERE 50 SHARES EACH TO THREE EMPLOYEES AND RETAIN 50 SHARES MYSELF.
COULD THE IRS
SAY A 0.50% INTEREST RATE IS THE EQUIVALENT OF A GIFT AND FORCE A CHANGE?
RONALD A. REMICK