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If an LLC holds stock in a company and then distributes the…

If an LLC holds stock...
If an LLC holds stock in a company and then distributes the stock to the members of the LLC, is it a taxable event? Or, does the taxable event occur when the member sells the stock?
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9/26/2017
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
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Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
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Hello my name is ***** ***** I will be able to assist you today.

If the stock was given as a form of compensation then the payment of the stock would be currently taxable unless there is a restriction of access to the stocks.

If or when the the taxpayer sells the stock in the future, the taxpayer will have a cost basis in the stock and the gains or loses will be calculated based off of the stock basis.

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Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
Satisfied Customers: 2,360
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
Verified
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Chad EA, CFP ®
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Category: Tax
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