You can get the capital gains exemption on a sale of shares to your children. You can be paid with corporate funds.
But here’s the question: Can you have both?
It is like having your cake and eating it too.
Yes, you can but be careful. Many conditions apply. If it goes wrong, it goes badly wrong. Instead of a tax-free capital gain, you end up with a dividend.
The rules for transitioning the family business are complicated but workable. They need a lot of care and attention to detail.
There are conditions at every stage:
- Before the sale
- On the sale
- For 36 months (or longer) after the sale
If anything is not exactly correct, the plan fails.
How do you handle this?
With a checklist.
Where do you get a checklist?
With our 2024 Tax Seminar Series where we cover this topic in Session 3.
Each year, we put on a Tax Seminar Series with important updates and tax planning ideas. It has been attended by thousands of CPAs over the years. Most repeat year after year.
Find out how you can register and learn new tax planning ideas like those above for capital gains.