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Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 962
Experience:  Certified Public Accountant
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How can I reinvest term capital gaines into new company or

Customer Question

How can I reinvest long term capital gaines into new company or device to defer the taxes
Submitted: 2 months ago.
Category: Tax
Expert:  Mark Taylor replied 2 months ago.

Hi, my name is Mark. I will be happy to help you with your questions. What type of asset to did sell to generate the capital gain?

Customer: replied 2 months ago.
Sale of 1/3 of my equity in an Internet startup thT
Customer: replied 2 months ago.
That was held longer than 5 yrs
Expert:  Mark Taylor replied 2 months ago.

What kind of entity was the startup (LLC, S-Corporation, C-Corporation)?

Customer: replied 2 months ago.
S/Corp
Expert:  Mark Taylor replied 2 months ago.

Did you sell your shares?

Customer: replied 2 months ago.
Want to just move the gain to the new Corp
Customer: replied 2 months ago.
Expert:  Mark Taylor replied 2 months ago.

Unfortunately you would not be able to defer the gain. The capital gain rates range from 0-20%. How much of a gain did you have on the sale?

Customer: replied 2 months ago.
3.6 over 9/yrs
Customer: replied 2 months ago.
Equal monthly payments
Customer: replied 2 months ago.
18 yr amortization balloon after 9
Expert:  Mark Taylor replied 2 months ago.

What was your basis in the stock?

Customer: replied 2 months ago.
Need to figure out that
Expert:  Mark Taylor replied 2 months ago.

Is the 3.6 all capital gain?

Customer: replied 2 months ago.
it was
Expert:  Mark Taylor replied 2 months ago.

It sounds like you are receiving $400,000 and then you will receive a balloon payment. You would recognize the gain as you receive the cash. Do you have any other income? At a taxable income of just above $450,000 (for married filing joint) the capital rate increases from 15% to 20%. Assuming that there is not a lot of other income the majority of the capital gain would be taxed at a 15% rate for federal. You would also be subject to state taxes on the gain.

Customer: replied 2 months ago.
No additional Income
Expert:  Mark Taylor replied 2 months ago.

Are you married?

Customer: replied 2 months ago.
No
Expert:  Mark Taylor replied 2 months ago.

The 20% rate for single tax payers would start at taxable income above $415,050. The first $37,650 of the gain would be taxed at 0% federally. This is the amount of tax where you would be in the 10 and 15% bracket. If you are in the 10% and 15% bracket the capital gain rate is 0%. The amount above would be taxed at 15%. Of course you would need to considered the state taxes on the gain.

Customer: replied 2 months ago.
No state tax in FL
Expert:  Mark Taylor replied 2 months ago.

That is a positive.

Customer: replied 2 months ago.
no 1031 exchange type
Expert:  Mark Taylor replied 2 months ago.

A 1031 like kind exchange is not available for the sale of stock. It would be available for real property, equipment.

Expert:  Mark Taylor replied 2 months ago.

I am sorry that I could not provide a more tax friendly response.

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