Say you have three partners in a business, one of them is retiring and the business wants to buy out his good will over a period of time. However, the goal is to have the retiring partner responsible for the taxes on the payments. How do you structure this so it passes muster with the irs. Basically, how can you characterize payments to the retiring partner over a period of time so that they are income to the partner, and not taxable to the partnership.
One thought is to have the retiring partner work for a few years till age 65, have disability insurance on the income. After that though the partner wont work but we want to continue the income payments for several years after.
Thanks
2006-11-02
05:55:43
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4 answers
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asked by
Owenmax
1