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bdk
Wrecking crew


Joined: 24 Mar 2008
Posts: 1611
Location: Hell

Re: Looking for resource for possible identity fraud Tax/IRS
PostPosted: Sun Dec 30, 2012 1:52 am Reply with quoteBack to top

achtung wrote:
bdk wrote:
achtung wrote:
bdk wrote:
achtung wrote:
bdk wrote:
OK!

Now I have another thing to run by since you seem to be up to speed on tax code/ law...

If I sell my business to another larger business for cash and/or stock in the larger corp is the stock considered income? $1mil cash $1mil in stock , is the $1mil stock viewed as income since it was an instrument of payment for my business?


Any time you sell a business, there are taxable gains No matter what was received as value.


If you take the stock and hold it, there will (usually) be no immediate tax. The tax comes into play if/when you sell the stock.



Ok but if one is "paid" in stock is it not considered income? Im not so much concerned with it being taxed or not. I want to know definitively if it is considered income?


Yes, it is income. It often gets confused, because it is taxed as "capital gains" yet it always counts as income.

Are you sure you do not have a cost basis to deduct from the proceeds? That can offset a huge portion of what you have to pay upfront


I don't know this is actually for a court case that IMO this alleged income has been completely overlooked! Is there any civil/IRS code you can cite to back this up? I want to hand it to atty and tell them "hey you missed this clowns income staring you in the face!"


All of this is covered in IRS section 453. Section A deals with the tax deferral strategies.

You would have to have the sales contract for the business to figure out what the deferral strategy was, in order to find the future tax liability of your friend.


hmmm interesting so "installment" is the method of payment cash/stock... i sent PM

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bdk
Wrecking crew


Joined: 24 Mar 2008
Posts: 1611
Location: Hell

Re: Looking for resource for possible identity fraud Tax/IRS
PostPosted: Mon Jan 07, 2013 7:35 pm Reply with quoteBack to top

bdk wrote:
achtung wrote:
bdk wrote:
achtung wrote:
bdk wrote:
achtung wrote:
bdk wrote:
OK!

Now I have another thing to run by since you seem to be up to speed on tax code/ law...

If I sell my business to another larger business for cash and/or stock in the larger corp is the stock considered income? $1mil cash $1mil in stock , is the $1mil stock viewed as income since it was an instrument of payment for my business?


Any time you sell a business, there are taxable gains No matter what was received as value.


If you take the stock and hold it, there will (usually) be no immediate tax. The tax comes into play if/when you sell the stock.



Ok but if one is "paid" in stock is it not considered income? Im not so much concerned with it being taxed or not. I want to know definitively if it is considered income?


Yes, it is income. It often gets confused, because it is taxed as "capital gains" yet it always counts as income.

Are you sure you do not have a cost basis to deduct from the proceeds? That can offset a huge portion of what you have to pay upfront


I don't know this is actually for a court case that IMO this alleged income has been completely overlooked! Is there any civil/IRS code you can cite to back this up? I want to hand it to atty and tell them "hey you missed this clowns income staring you in the face!"


All of this is covered in IRS section 453. Section A deals with the tax deferral strategies.

You would have to have the sales contract for the business to figure out what the deferral strategy was, in order to find the future tax liability of your friend.


hmmm interesting so "installment" is the method of payment cash/stock... i sent PM


From what I understand company ABC merged with Company XYZ for cash and stock (non-voting common stock) The officers of ABC became employees of XYZ, that said is the cash and stock they received considered taxable income, for the year their business ABC was acquired/ merged with XYZ.

_________________
http://howlibertydied.blogspot.com/

Remember remember the fifth of November. Gunpowder, treason and plot. I see no reason why gunpowder, treason
Should ever be forgot...
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