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C Corp A owns 48 % of C Corp business and I personally own…

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C Corp A owns 48...
C Corp A owns 48 % of C Corp business B and I personally own 65 percent of Corp A. The 52 percent owner of Corp B wants to buy out Corp A shares for 100 percent of Corp B. Can the buyout occur between the two share holders 65/35 in Corp A and Corp B or is it best for the transaction to occur directly between Corp A and Corp B?
Submitted: 7 months ago.Category: Tax
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Answered in 13 minutes by:
10/5/2017
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 7 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,200
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I'd recommend that this be done as a private transaction between stockholders, as a stock sale. (Enures capital gains treatment for the seller ...a much simpler transaction (nothing happens on the company's books - other than changing the stock ledger at corporation A showing who now owns the stock.

...

Have a stock purchase agreement drafted.

...

Again, no accounting for inside basis issues, seller gets capital gains treatment by making this a stock sale between individuals, and no "Form 8594, Asset Acquisition Statement Under Section 1060."

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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,200
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Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

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