Discussion:Tax free exchange stock for stock
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Discussion Forum Index --> Tax Questions --> Tax free exchange stock for stock
| 21 November 2006 | |
| Is the exchange of common stock for preferred stock considered a tax free exchange? | |
Richard@rinercpa.com (talk|edits) said: | 21 November 2006 |
| No. Bye | |
| 19 March 2007 | |
| Individuals A & B each own 50% of Co#1 and Co#2.
Can they figure out a way (tax free) so that A owns 100% of Co#1 and B owns 100% of Co#2 ? | |
Rgtaxservice (talk|edits) said: | 19 March 2007 |
| It's a taxable event. Depending on circumstances and amounts, it could be tax free. | |
| 19 March 2007 | |
| I can think of a way: get married & transfer to your spouse. May have to get divorced from current spouse first, but that is such a small price to pay to avoid tax it is probably worth it, especially if you have been considering it anyway. One trap: that alimony is worse than no exception to 72(t). But it would be a tax free exchange. | |
| 19 March 2007 | |
| Can they both vote to "cancell" their respective partner shares...thus eliminating joint ownership in each Co.? (tax free) | |
| March 19, 2007 | |
| Doubt it. Wonder if there isn't some merger concept for what you describe. Folks with experience in that arena would have to log in. First combining the two corps perhaps? And then re-splitting them? Just wondering. | |
| 19 March 2007 | |
| You could certainly combine the two corps tax free...it's the future split that is problematic. | |
| 26 August 2008 | |
| I have the exact situation that FSD mentioned above - 2 chiropractors owned 50% each of the stock of 2 separate S-corps. They decided to go their separate ways, so chiro #1 gave chiro #2 his shares of corp A, and chiro #2 gave chiro #1, his shares of corp B. They now each own 100% of one corp.
I've never had this situation - I understand what the cost basis is for the chiro who exchanged his stock, but what about the value of the shares of stock received in exchange - wouldn't it be the cost basis of the shares given up by the other chiro? I'm sure the answer is clear as day, but I've not seen this one yet in my experience so I want to be sure I am understanding this transaction correctly. Thanks for any guidance . . . | |
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