S-Corporation GALA with three equal shareholders(A,B,C) own two businesses D, E. A&B wants to buy business D and C wants to buy business E. What is the best way to do this with the least tax events? Can C pay A&B off for the net of what he is getting and giving up and all continue to own GALA with adjusted K-1's...without any other tax consequences?
Tax Professional Answers
If the company does not want to purchase one or both businesses, than the individuals would have to determine the method which made the most sense relative to their individual tax position. However, I couldn't make a formal determination until I knew the details of each individual's situation.
So who would still own the Company?
The company owns three companies, but the three stockholders want to purchase the assets in different ownership combinations. The company should look to performing a reorganization under 368. However, I would need to know more details about the underlying business and intended post-transaction intentions to give a final answer.
Basically Shareholder C wants out and want to take one gas station with him while selling his shares back to A&B. Someone had advised them that they could do all this without causing a taxable event . I do not see a way of doing that and that was the basis of the question.
Tax Questions By Topic:
Meet Leading Tax Advisors
Lakeland, Florida, USA
New York, New York, USA
Federal Tax Credits & Incentives Practice Leader
Denver, Colorado, USA
Fullerton, California, USA
Topanga, California, USA
Sanford, Florida, USA
Tyrone , Pennsylvania, USA
Rancho Santa Fe, California, USA
CEO/Certified Financial Advisor
Chattanooga, Tennessee, USA
Stellenbosch, South Africa
Exchange Control & Master Tax Practitioner (SA)
Longview, Washington, USA
Tax Consultant/Tax Advisor
Santa Clara, California, USA
Tax Principal - President
Boston, Massachusetts, USA
Tax Partner, International Tax
Senior Tax Manager
Toronto Mississauga Oakville Burlington Hamilton, Canada