Taking over father's business Hello,
My father has a small business, setup as an S-corp, and he is looking to retire. He would like to give the business to me at no charge and I will continue to run it as he did. My father is the sole stockholder in the corporation and holds 10 shares of stock. The plan is to transfer 5 shares over to me initially and then at a later date transfer the last 5 shares.
How should we structure such a sale. Initially when the corporation was setup the stocks had no par value. My father's cost basis is probably around $100,000. As I said he would like to just hand over the stock to me but is worried about getting burned in taxes. I am clueless when it comes to such matters. Does he gift the stocks to me or should he sell them to me at a low value? Should we draw up paper work to sell half the business and assets or just transfer the stocks for now?
We just want to get the stocks into my name so I can become an officer of the corporation and continue to run the corporation the same way. It sounds simple enough but we are just leary about getting hit with heavy taxes.
Thank you!
Kevin |