Purchase Of Scorp Stock

[Maribeth]

I have a personal tax return client that has paid taxes on a stock repurchase agreement. In other words, stock was given to him and the value of the stock was included in his W2. The W2 was grossed up to include most of the federal & state taxes based in the value of the stock included.

My question is, as an "outside" basis I plan on treating his outside basis for the full amount included on his W2 that included the Value of stock and federal and state taxes grossed up . Anybody have a problem with this?

This is an existing business and my client will be a 10% owner.

Example: Stock Value= $100,000
Federal taxes= 30,000
State taxes= 6,000

W2 Total= $136,000 This is the amount I want to include in his "Outside Basis"

If the $136,000 was included in Box 1 of his W-2, then yes, that is his basis.

Maribeth

[BOB W]

Bump up for more opinions........

[BOB W]

Disagree. The basis of the stock is based on it's value. The additional bonus paid is irrelevant to basis.

Thanks Dave for your opinion.... That's what I'm looking for... Just need more opinions.

Please keep them coming..

[Davc]

Disagree. The basis of the stock is based on it's value. The additional bonus paid is irrelevant to basis.

[BOB W]

The box 1 on the W2 equals 136,000$? Right. that is the basis.

Thanks Harlan..............just checking............

[ChEAr$]

I have a personal tax return client that has paid taxes on a stock repurchase agreement. In other words, stock was given to him and the value of the stock was included in his W2. The W2 was grossed up to include most of the federal & state taxes based in the value of the stock included.

My question is, as an "outside" basis I plan on treating his outside basis for the full amount included on his W2 that included the Value of stock and federal and state taxes grossed up . Anybody have a problem with this?

This is an existing business and my client will be a 10% owner.

Example: Stock Value= $100,000
Federal taxes= 30,000
State taxes= 6,000

W2 Total= $136,000 This is the amount I want to include in his "Outside Basis"

The box 1 on the W2 equals 136,000$? Right. that is the basis.

[BOB W]

I have a personal tax return client that has paid taxes on a stock repurchase agreement. In other words, stock was given to him and the value of the stock was included in his W2. The W2 was grossed up to include most of the federal & state taxes based in the value of the stock included.

My question is, as an "outside" basis I plan on treating his outside basis for the full amount included on his W2 that included the Value of stock and federal and state taxes grossed up . Anybody have a problem with this?

This is an existing business and my client will be a 10% owner.

Example: Stock Value= $100,000
Federal taxes= 30,000
State taxes= 6,000

W2 Total= $136,000 This is the amount I want to include in his "Outside Basis"