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- Apr 17, 2012
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Our company has bought several cars for various family members over the years (it's a 3rd generation company). All autos have been in the company name and we have put them on our depreciation schedule. We recently told all the family that we are exiting the car business and we will no longer buy them cars.
Recently, the father of the current CEO went and sold his Mercedes (which the company owned) and bought a new pick-up truck. The only problem is he is not willing to give us the proceeds of the transaction. The father is a minority shareholder but does not work at the company. Here are the details:
Sold:
2011 MS550V Mercedes
$75,000 Trade in value
$26,790 Pay-off for existing loan
* the father put $30,000 of his own money in the original purchase, which we said we would reimburse
Bought:
Pick-up Truck
$47,641
The way I see it, the father owes the company $18,210. Assuming the worst case scenario, what are some of the potential ramifications to the company (and the father for that matter) if we do not collect the proceeds from the sale of the Mercedes? In specific, I'm curious about any potential gift tax issues, amendments to our depreciation schedule, and general tax code issues that will bite us at the end of the year when we are audited. In other words... please help! Thanks.
Recently, the father of the current CEO went and sold his Mercedes (which the company owned) and bought a new pick-up truck. The only problem is he is not willing to give us the proceeds of the transaction. The father is a minority shareholder but does not work at the company. Here are the details:
Sold:
2011 MS550V Mercedes
$75,000 Trade in value
$26,790 Pay-off for existing loan
* the father put $30,000 of his own money in the original purchase, which we said we would reimburse
Bought:
Pick-up Truck
$47,641
The way I see it, the father owes the company $18,210. Assuming the worst case scenario, what are some of the potential ramifications to the company (and the father for that matter) if we do not collect the proceeds from the sale of the Mercedes? In specific, I'm curious about any potential gift tax issues, amendments to our depreciation schedule, and general tax code issues that will bite us at the end of the year when we are audited. In other words... please help! Thanks.