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04 November 2016 05:39 This is a tech startup incorporated

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04 November 2016 05:39 This is...
04 November 2016 05:39
This is a tech startup incorporated in the last two weeks. An incubator offered us $25000 for 6 percent of our stock. We incorporated at .0001 per share and the incubators investment bring it to .0595 per share. Is the difference taxable now or only if I sell it?
Submitted: 1 year ago.Category: Tax
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11/5/2016
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
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Sorry I needed to step away from the computer. When the stock is sold the difference between the price and the original per share value is recorded as additional paid in capital. There would be no tax impact to the corporation. When I responded before I thought that you were buying the stock individually. Individually there are special rules regarding for gains and losses of qualified small business stock.

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Customer reply replied 1 year ago
Would there be a taxable event for the shareholders?
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

The only time there would be a taxable event is if the shareholder dispose of their stock. The shareholders are separate from the corporation.

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