Capital gains?

Question

If you take the money you recieve from a stock buyout
our ex partner bought out our stock....and you apply some of
those monies to start a new company can you still get taxed on it? What if the stock it self at the time had no value ?according to his accountant anyway

Answer 1

It doesn't matter what the other partner's accountant says, it's the fact that you got paid for your stock that makes the sale of the stock taxable to you. Doesn't matter if you use the monies to start a company it's still taxable. You gain or loss would be the difference between what you bought the stock for (you hopefully put in some capital into the company when it was formed, and that would be your basis for the stock) and what you sold it for.

Answer 2

Your gain (or loss) is the difference between what you received when you sold the stock and your basis (normally the price you paid for it plus cost of sales). What you do with the money your received may have tax consequences but that has nothing to do with the Capital Gains tax that may be due.

Answer 3

The accountant is wrong. The stock had the value that you got paid for it. If that was different than your cost then you have a capital gain or capital loss.

Answer 4

If the stock at the time had no value, you wouldn't have gotten paid for it. If you got paid, then what you were paid is by definition the value at that time.