USA Tax question

[Hung Lam]

I am doing c corp tax return with Fy 10/2018 - 9/2019.
Stockholder sold business to other person

effective date 10/1/18 seller received $300,000, and a note $240,000. First payment of the note is on 12/1/18.

on effective date, seller have to tranfer 24 % of stock to buyer and keep 76%

in closing date, seller receive additional $50,000 and seller have to transfer the remaining 76% of stock to buyer

my question is
1. Is this a stock sale?
2. What is the closing date? Do i need to ask client ?
3. There is nothing to report the sales in c corp tax return , i just write a not for IRS so they know this c corp has new ownership ? Or i need to fill out some form?

thank you

 

[Werner Reisacher]

I strongly suggest that you discuss this issue with an experienced professional in legal and tax matters. There must be a buy-and-sell agreement that outlines all the details about this transaction. Who is the buyer of the shares? (corporation or individual investor) Review the minutes of the shareholder's meetings that approved the sale/purchase of the transaction. Has the change in ownership of the company been reported to the Secretary of State's Corporate Register?
Unless you have verified that the financial transaction meets all legal requirements, I would not advise that you are proceeding with the tax declaration based on your own assumptions of the facts.