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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29558
Experience:  Taxes, Immigration, Labor Relations
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I am trading my interest in a family business and an LLC to

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I am trading my interest in a family business and an LLC to my siblings through a Tedra Agreement . The problem is I won't know untill next February or so if there will be a profit to pay taxes on. I would like to know in advance a ballpark figure of taxes I will owe. this will be my first year as a direct partner. does the business and the LLC have to file 'estimateds'? I would like put something in the agreement that I will be forewarned of tax liability for this year.....I will have no access to books when i sell...that's part of the agreement.

LEV :

Hi and welcome to Just Answer!
The Trust and Estate Dispute Resolution Act (TEDRA) is a way to resolve the dispute.
If you are selling your interest in the LLC - your capital gain will be = (selling price) - (basis).
In additional - assuming the LLC is treated as a partnership - you are a subject of taxes on your pro-rata share of partnership. The partnership tax return is generally due by Apr 15 of a following year.
The IRS doesn't require the partnership to provide any advance information to partners.
However such requirement may be included into the partnership agreement or into the Tedra Agreement that you will sign.
Let me know if you need any help.

Lev and other Tax Specialists are ready to help you
Customer: replied 6 years ago.

. I am getting a settlement that is using a value for my share of an inheritance of about 600 K. It is being discounted 48% because of risk my brother and sister say they are taking. the LLC is a partner in the partnership and I've had a share in that for years. The direct partnership shares I got from a trust which dissoved upon my Mom's passing. My brother and sister are essentially giving me Mom's house in exchage for all my interest in the LLC, the Partnership and the estate . .. My Mom passed in 2010 which was a non-tax year for death tax.

 

How would I find out what capital gains I would pay?

You are correct - there were no federal estate taxes in 2010.

You still need to determine the basis of each property you inherited.

Generally, for the estates of decedents dying after December 31, 2009 - the basis of assets acquired from the decedent is the lesser of the decedent's adjusted basis (carryover basis) or the fair market value of the property on the date of the decedent's death.

However, there are exceptions to this general rule:

The executor can allocate up to $1.3 million to increase the basis of assets - up to their fair market values at the time your mother died - that is your so-called step-up basis.

You may use step-up basis instead of the purchase price if the total value of such increase is below $1.3 million. That means your capital gain for tax purposes is zero and there will not be any capital gain taxes.

Lev and other Tax Specialists are ready to help you