shares

[TAX]

Client, C Corporation, with two shareholders (A & B) 50% each.

After a dispute, Shareholder A bought ALL shares from B for $150,000

(1) A took loan of $60,000 from same Corporation

(2) A piad $150,000 to B (60,000 plus 90,000 from his fund)

How would I account for it and show on tax return?

Thanks!

[ChEAr$]

the only

Client, C Corporation, with two shareholders (A & B) 50% each.

After a dispute, Shareholder A bought ALL shares from B for $150,000

(1) A took loan of $60,000 from same Corporation

(2) A piad $150,000 to B (60,000 plus 90,000 from his fund)

How would I account for it and show on tax return?

Thanks!

effect is an entry on the books for the shareholder loan from the corporation.

the stock sale is strictly between the two with old stock certificate being canceled and
a new one to the purchaser for same number of shares.

IOW, Capital stock remains the same and stockholders' equity does not change.

[erchess]

Harlan or anyone who knows

I think OP would like to know, and I would certainly like to know, how this transaction is reported on the individual returns. I assume only seller has reportable Sch D transaction but what is his basis? What he contributed to the corp perhaps years ago?

[ChEAr$]

correct

I think OP would like to know, and I would certainly like to know, how this transaction is reported on the individual returns. I assume only seller has reportable Sch D transaction but what is his basis? What he contributed to the corp perhaps years ago?

Only the seller has a reportable, taxable transaction. Or a loss to take maybe?
Basis will naturally be price he paid for the stock, which sounds like original stock to me.