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hello,
i have a client running a business as an authorized retailer for a large corporation. The corporation is now turning over retailers to corporate stores and taking over.
The client has been managing this business for 10+ years and will be given around $400,000 by the corporation for the store and all the rights.
The client has been paying rent on their store, so how will this $400k be taxed? what is their cost basis? The amount they put into the company + any renovation work, etc? I'm assuming its their Paid in Capital on the Balance Sheet.
it is an s-corp and they will be dissolving the company once the deal goes through in the next few months.
Any literature on tax implications will be greatly appreciated.
i have a client running a business as an authorized retailer for a large corporation. The corporation is now turning over retailers to corporate stores and taking over.
The client has been managing this business for 10+ years and will be given around $400,000 by the corporation for the store and all the rights.
The client has been paying rent on their store, so how will this $400k be taxed? what is their cost basis? The amount they put into the company + any renovation work, etc? I'm assuming its their Paid in Capital on the Balance Sheet.
it is an s-corp and they will be dissolving the company once the deal goes through in the next few months.
Any literature on tax implications will be greatly appreciated.