Discussion:Authorizing Additional S Corp Stock
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Revision as of 14:10, 27 July 2009
Discussion Forum Index --> Basic Tax Questions --> Authorizing Additional S Corp Stock
Discussion Forum Index --> Tax Questions --> Authorizing Additional S Corp Stock
| 27 July 2009 | |
| I have a client who owns 100% of all authorized stock in his S corp. He wants another person to become a 15% stockholder for $75,000. Both parties have agreed to these terms. I am trying to figure out a way to do this with the least amount of tax consequences. (They for sure want to structure this as a stock purchase - not a loan.) If my client sells some of his stock to the other party, of course my client would have to report the gain (almost 100%) on sale of his stock. The only other option, that I can think of, is for the corp to authorize additional shares of stock and then have the corp sell the other party enough shares to make up the 15%. I have never been involved in a corp having to authorize additional stock shares so I don't know how difficult this is to do and therefore if it is feasible or not. Have any of you been involved in this process before? | |
