Accountants....question for you

searcher profile

March 21, 2024

by a searcher from University of Pennsylvania - The Wharton School in Miami, FL, USA

Hello!

I was speaking with a seller who just last week bought out her 50% partner (her sister). Involves real estate + OpCo.

Seller told me that, as part of the deal, she agreed not to sell the business for 2 years bc it would provide tax benefits to her sister (her former partner).

I have not heard of anything like this, but would not be surprised if there was something in the tax code addressing it.

Can anyone provide any colour?

Thank you!

0
3
91
Replies
3
commentor profile
Reply by a professional
from Harvard University in Lynbrook, NY 11563, USA
Two years is often a period that keeps you safe from the step transaction doctrine (a branch of the substance over form doctrine that collapses multiple step transactions into one for tax purposes), but hard to say without more detail if it's that (and what the underlying transaction generating the worry is, if yes) or something else.
commentor profile
Reply by a searcher
from Harvard University in Philadelphia, PA, USA
Following this thread as I'm always curious to hear how folks are going about providing tax efficient terms to sellers.
commentor profile
+1 more reply.
Join the discussion