My partner currently wants to buy me out. Is there anyway I can avoid taxes on the buyout?
2006-09-27 05:35:36 · 6 answers · asked by mobyisaparrothead 1 in Business & Finance ➔ Small Business
If the payout is less than what you invested, no taxes.
If it is more, then yes. You pay the difference. For example: Say you invested $10,000 to start and/or maintain the company. Say that your partner is going to buy you out for $100,000. You pay taxes on $90,000. If the company is more than 1 yr old, you pay long term capital gains tax rate.
Best bet is to have your accountant give you the details.
2006-09-27 05:55:28 · answer #1 · answered by SPLATT 7 · 1⤊ 0⤋
Try making it a capital gain rather than short term gain or profit. At least you will be taxed in a lower rate. However, there is no way avoiding tax, legally.
You can also work out a plan so that your partner buy you out over multiple number of years. So that you can avoid paying higher tax rate on the lump sum capital gain.
2006-09-27 05:45:17 · answer #2 · answered by JQT 6 · 0⤊ 0⤋
If it is monies that have already been taxed, i.e. retirement that they are paying you with the answer is no. If it a straight buyout with their money you will probably pay taxes.
2006-09-27 05:43:35 · answer #3 · answered by hydroco 3 · 0⤊ 0⤋
Yes you have to pay taxes.
2006-09-27 05:42:49 · answer #4 · answered by Laquishacashaunette 4 · 0⤊ 0⤋
I'm pretty sure you cant but it would be worth talking to a lawyer.
good luck
2006-09-27 05:44:42 · answer #5 · answered by darrenfanelli 3 · 0⤊ 0⤋
yes to the first ?
no to the second ?
2006-09-27 05:44:09 · answer #6 · answered by Enigma 6 · 0⤊ 0⤋