Start-up using shares as incentive We have a start-up company and over time have given out % of the company to people making various contributions of time/expertise. More recently, the company has started making money (not yet profitable), and a few people have contributed $ for a percentage of the LLC. We are getting ready to, again, allocate a small % of the company to an individual to recognize his time and efforts. Can someone explain to me how I need to think about this for tax purposes? Does the individual getting the % need to recognize income equal to the valuation of the % based on the last cash contribution? Thank you! |