Client is an employee of a privately held company that was acquired in 2018 by another firm (public). The employee's shares of the private company were purchased and he received cash of $20,000 and shares in the new company valued at $5,000. Lastly the client also received a payment of $4,000 regarding section 338. The client will be receiving more details soon. I have never handled this type transaction. I will add more information when available. Thanks.
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My client is to receive a K-1 statement on this transaction. I will see what is recorded there and add here more information. -
I have learned I need to complete Form 6252, Installment Sale Income. To update and correct the original information I posted on January 5. My client received the following in the acquisition for his shares that were purchased: cash 50,000; distributions 5,000, restrictive stock in the new company 7,000, promissory note 10,000 and an amount to help on the taxes 8,000. Payments on the promissory note to my client begin in 2019 for 4 years. All the amounts cited were in the K-1, box 16, D. His stock basis at the sale date in 2018 is calculated to be 3,193 when including the various amounts in the K-1. One question is for form 6252, Part I, line 8, Cost or other basis of property sold; is it the basis calculated on the sale date just prior to including the amounts on the K-1 or after including the K-1 amounts? Additional information on the K-1 included amounts in box 17, V Section 199A income, W Section 199A W-2 wages, X Section 199A unadjusted basis AA Excess Taxable Income and AC Other Information. This is way beyond my knowledge. Any help would be appreciated.Comment
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