Purchase of S Corp Hello,
I am negotiating a purchase of a Health and Life Insurance Agency. The Owner passed away in 2014, and his daughter has inherited the business. She does not want to have an "active" roll in the agency.
The agency is an S Corp, with $500,000 in shares. I do not wish to purchase the Stock, only the Assets. This would be the furniture and the books of business etc.
This is what the owner asked:
As I continue to talk with different professionals around the structure of the sale of AFS, I realized that I needed to check with you on exactly what you want to purchase. You are looking at purchasing the book of business with the office equipment/furniture and not the S-Corp itself, is this correct? There are tax implications for the sale either way, but they are more complicated when it is a sale of an S-Corp rather than specific assets of the corporation.
This is what my lawyer said:
I took a brief look at the attached and would suggest that you also talk with your accountant about the related tax issues today. Because of Mr. T's death, there may likely be a stepped up basis regarding the assets of the business as of the date of Mr. T's death which would increase the value of the tax basis in connection with the sale of the assets (in other words reduce the tax implications).
I am not able to get a hold of my CPA and I need some guidance by tomorrow 3/14. Help? |