Just asking ahead of time. I have a C-corp that is in the process of selling. They have hired and listed with a professional that they say sells businesses all the time, so when the time comes, I'm figuring to look to him for a lot of guidance.
The secretary of the company owns the building personally. We have been depreciating all of their assets and improvements however. This is a small business that never made the S election and has not had any stock payments, they just did what the needed to do in the beginning, I believe all the stock issued is split evenly three ways among these family members. The secretary put a substantial amount of money up personally to buy a business asset we depreciated, so I showed that as a loan from her to the business. (no note or anything)
Just right off the top of my uneducated head about this, I would think there would be capital gains/losses on the assets split among the stockholders at their percentages, the secretary could get her money back that was invested (tax free) and the rest of the sale would be taxable income split among the stockholders at their percentages. Am I close to right???
When the time comes, is their anything I should look out for?
The secretary of the company owns the building personally. We have been depreciating all of their assets and improvements however. This is a small business that never made the S election and has not had any stock payments, they just did what the needed to do in the beginning, I believe all the stock issued is split evenly three ways among these family members. The secretary put a substantial amount of money up personally to buy a business asset we depreciated, so I showed that as a loan from her to the business. (no note or anything)
Just right off the top of my uneducated head about this, I would think there would be capital gains/losses on the assets split among the stockholders at their percentages, the secretary could get her money back that was invested (tax free) and the rest of the sale would be taxable income split among the stockholders at their percentages. Am I close to right???
When the time comes, is their anything I should look out for?
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