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How do I report the sale of my S Corp?
Lets say I sold my company, it was an S Corp, how do I report that to the IRS?
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Listen to the audio
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In this audio snippet, you'll hear about:
- It depends on what you're selling – stock transfer or asset transfer?
- If it's a plain vanilla stock transfer, just selling stock, you report that on Schedule D of income tax return
- Lots of ways to reduce tax liability when selling company
Audio Transcript
Travis:
How do I report the sale of my S–Corp? Let's say I
sold the company. It was an S–Corp; how do I report that to the IRS?
Yosef:
Well, again, that's going to depend on what exactly you are selling. In
previous discussions, we discussed the issues of buying and selling
businesses, and whether there should be a stock transfer or an asset
purchase, etcetera.
Sometimes
it will be a combination. But again, if it's a plain vanilla stock
transfer whereby you're just selling your stock, you can report
disposition on Schedule D of your income tax return.
Travis:
OK. So, depending upon your situation.
Yosef:
In a way, that isn't necessarily the case, though. Usually, when
someone has created a successful business, when it comes time to
selling the business, there are multiple ways of plying the transaction
to get more advantaged taxation. And so, they're not always going to be
selling the business straight up for stocks, for cash, etcetera.
Travis:
Right. It's never that simple.
Yosef:
There's a whole section of section 368 and 281 of the Internal Revenue
Code which is replete with different reorganization mechanisms to
provide taxpayers with a deferral of any gain they may have when they
sell a business.
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