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socrateaser
socrateaser, Lawyer
Category: Tax
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Experience:  Retired (mostly)
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Transfer stocks from personal account into LLC brokerage

Resolved Question:

I have formed an LLC along with another person.
1) Can we transfer the stocks that we hold in our personal brokerage account into our brokerage account of newly formed LLC company.  The  brokerage company does allow the transfer.
What are the tax implications.

2) We have stocks that were assigned to us as part of the bonus plan every year as part of the employee stock options.
Can we transfer those also after the vesting period.
Submitted: 5 years ago.
Category: Tax
Expert:  socrateaser replied 5 years ago.
1) Can we transfer the stocks that we hold in our personal brokerage account into our brokerage account of newly formed LLC company. The brokerage company does allow the transfer. What are the tax implications.

A: You can, and there would be no tax effect if the ownership interests are substantially the same after the transfer as before transfer.

2) We have stocks that were assigned to us as part of the bonus plan every year as part of the employee stock options. Can we transfer those also after the vesting period.

A: If the stock is free and clear yours to do with as you wish, after vesting then you can transfer it. If there are conditions associated with your rights, then you can't transfer the stock, because that transfer would breach the contract with the employer. Or, if the ESOP stock is part of a retirement plan, then your transfer will have a tax liability that will have to be paid from some other source. So, you could transfer the stock, but not without a tax consequence.

Hope this helps.

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