Discussion:Basis in S corporation and partner buyout
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Revision as of 21:28, 31 July 2007; view current revision
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Discussion Forum Index --> Categorization Team --> Basis in S corporation and partner buyout
| 31 July 2007 | |
| We have a client that is an S corporation that is closely held. The husband and wife were both active in the corporation. The wife got mad at the husband (imagine that) and took most of the liquid assets from the corporate bank accounts.
They had quite a bit in loans that they had made and had a lot of basis. We booked all the money she took as repayments to the loans she had made while with husband. This ate up most of the basis, so he still has the loans owed to him, but cannot take as of yet due to no basis. He is buying her out of the company as part of the divorce. Is there any benefit as to the price he pays her? They have options for him to give her more or less for the business and then negotiate for more or less on spousal support. We are in a position wherein he needs to be paid back on the loans, but because of the basis issue....??? Any ideas? | |
| 31 July 2007 | |
| sounds more like a marital property settlement than a buyout to me - if so, her basis in her shares becomes his basis. | |
