Stock value


W

wbege

I have recently sold my son my S-Corp for 250K, on the
installment plan for 10 years.. The attorney that handled
the transaction for us (CPA/Attorney) did not give us a
value of the stock we sold my son. If the Corp had sold the
business, I can understand that the equipment would be
capital gains by %. The corp was a service business, we
rented space for 6 years and sold for what other companies
offered us. I'm not worried about a related sale.

I started with 1000 shares @ $1.00 because SC figures this
in license fee for corps. Our gross was between $250.000 and
$500,000 per anum during these years.

Although I plan to use a "Professional" for my return
(anyone ever heard of Worldcom and Enron, etc), how is the
stock price determined in a S-corp with no retained
earnings.

I "ain't" at all scared of reading. Altho my spelling and
typing may stink.
 
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P

Phoebe Roberts, EA

wbege said:
I have recently sold my son my S-Corp for 250K, on the
installment plan for 10 years.. The attorney that handled
the transaction for us (CPA/Attorney) did not give us a
value of the stock we sold my son.
If you sold him stock for $250,000, the value of the stock
you sold him was $250,000. Or do you mean there's a 250,000
total payout, and you don't know what portion is interest?
how is the stock price determined in a S-corp with no retained
earnings.
Are you asking what your basis in the stock is? The person
who did the S-corp return all along may be keeping a basis
schedule. If not, they can do the calculation if all the
returns are available to them (and prepared correctly). The
sum of the tax-basis equity accounts at the date of sale
probably isn't too far off, assuming you had no
distributions in excess of basis along the line.

Phoebe :)
 

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