Discussion Archives:Big gain, how to avoid

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Discussion Forum Index --> Advanced Tax Questions --> Big gain, how to avoid


Discussion Forum Index --> Tax Questions --> Big gain, how to avoid

Gary622 (talk|edits) said:

17 March 2009
My client owns an S Corp and created a software program (which he patented) that a company wants to buy from him for 3 million dollars. The buying company is willing to work with my client to do whatever it takes to keep the taxes at a minimum (sell the S corp stock, sell just the patent, trade buyers stock and cash for the patent....)

Any suggestions to keep the taxes to a minimum would be appreciated.

Death&Taxes (talk|edits) said:

17 March 2009
Got lots of time on March 17th to kick this around.

RoyDaleOne (talk|edits) said:

17 March 2009
That is what we get paid for, not to give away for free.

NMexEA (talk|edits) said:

17 March 2009
Yeah, I'm afraid that I agree with Roy. I don't mean to be rude but structuring a deal like this will mean a substantial fee but carry substantial professional liability exposure. It would be unreasonable to risk the latter without a share of the former. Either do the research yourself or consult a specialist and split the fee.

Southparkcpa (talk|edits) said:

18 March 2009
Sell the stock..... for cash. Cap gain rates as as low as ever.

If you believe in the buyer, take some stock.

Lalva (talk|edits) said:

18 March 2009
Donate the 3 million to me and I will pay the taxes :-)

Taxea (talk|edits) said:

18 March 2009
He is making a gross of 3 million and he doesn't want to pay the taxes. I agree with Lalva..send me the money and I will gladly pay the tax even if it is 2/3rds of the proceeds. Besides the taxes he has to pay on the gross will help all of us and isn't that Obama's thinking. taxea

BeachCPA (talk|edits) said:

18 March 2009
Your client should move to Nevada first. Who do I send my bill to?

NMexEA (talk|edits) said:

18 March 2009
You know...not only does the client need competent corporate tax advice, he will almost certainly require the services of an M&A lawyer to negotiate the agreement and draft the necessary documents and filings. I wouldn't be surprised if the parties end up doing an SEC disclosure.

$500/hour. That's my rate. Plus costs. And Gross Receipts tax.

(Am I worth it? SUUUUUUURRRRREEEEE...just sign here...)

Genskitty (talk|edits) said:

March 18, 2009
BEACH, Gary622 can send you the client then I can come over and help you out. That way I can learn more about corporate tax.

Trillium (talk|edits) said:

18 March 2009
Post from a consumer (non-pro) deleted, in accordance with the notice in the pink box at the top of the forum.

Gary622 (talk|edits) said:

18 March 2009
I would like to thank everyone for their useful advise. Since I really don't have the time to do the necessary reseach to help my client during this busy tax season, I was hoping that someone had experienced this situation before and could lend a helping hand. I was not looking for a step by step guide, only a clue if there were some kind of vehicle out there that my client could talk to someone who is more experience in this matter.

IDrinkYour Milkshake (talk|edits) said:

18 March 2009
wow

Southparkcpa (talk|edits) said:

18 March 2009
Gary

You should tell your client exactly that.

NMexEA (talk|edits) said:

19 March 2009
Gary? I'm going to seem rude again, I'm afraid.

This kind of deal isn't a "file two forms and read the Pub" sort of thing. I STRONGLY advise you to refer your client to a tax attorney or to a specialized CPA or EA with a working relationship with a tax attorney. I'm serious about this. Don't try this at home. Not only shouldn't you try it, it will necessariy entail doing things that you CANNOT do without engaging in the practice of law.

AEM CPA (talk|edits) said:

19 March 2009
Norm, is your rate really $500 an hour?

Kevinh5 (talk|edits) said:

19 March 2009
I believe he offers a discount to those whose net worth is less than $3 million.

Gary622 (talk|edits) said:

19 March 2009
NMexEA, as I mentioned above, I have no intention on handling this myself. Since I don't have the time to even try to research this, I did tell him to consult with a tax attorney. Thank you for your concern.

NMexEA (talk|edits) said:

19 March 2009
Is my rate $500/hour? Sure, if we're talking M&A in the multimillion dollar range and anyone is foolish eough to hire me. Which no one ever was!

No, I am at the moment a State employee and not in private practice but my usual lawyer rate ran between $150 and $200 depending on the nature of the work. If I ever manage to finish the LL.M. and start taking clients again, I'll start at the lower end of that range until I learn enough to be reasonably efficient in tax practice. But I can't imagine ever charging more than, say, $225. That's about par with the local commercial firms.

NMexEA (talk|edits) said:

19 March 2009
Of course, I will INSIST on being pid only in gold or silver coin...<G>

DbK14 (talk|edits) said:

19 March 2009
Wow, how things vary across the country. I'm first year staff and the firm bills me at $90. In north NJ, of course.
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