I am the single member of a PLLC established in 2008. The entity is disregarded for IRS purposes. I now want to sell my interest in the PLLC.
The buyer cannot pay the entire sales price up front. He will continue the work of the PLLC and generate revenue as I do now. The buyer will set up an S-corp to receive all revenue generated by the PLLC. The PLLC will pay its expenses and issue a 1099 for all income paid to the S-Corp. The S-corp would then turn around and make a payment to me personally for the yearly sales-price installment, which I should be able to treat as capital gains versus employment income.
Once the buyer makes the final installment payment of the purchase price, I would transfer my ownership interest in the PLLC to him or his S-corp.
I think I'm struggling with the simplicity of this route. Have I missed something critical?
The buyer cannot pay the entire sales price up front. He will continue the work of the PLLC and generate revenue as I do now. The buyer will set up an S-corp to receive all revenue generated by the PLLC. The PLLC will pay its expenses and issue a 1099 for all income paid to the S-Corp. The S-corp would then turn around and make a payment to me personally for the yearly sales-price installment, which I should be able to treat as capital gains versus employment income.
Once the buyer makes the final installment payment of the purchase price, I would transfer my ownership interest in the PLLC to him or his S-corp.
I think I'm struggling with the simplicity of this route. Have I missed something critical?