Sunday, November 24, 2013

How does estate tax affect private business interest?

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piano smas


So say that an old woman owns 30% of a private company, and when she dies, her estate is taxed according to the law. How are her shares handled in terms of taxation without damaging the liquidity of the company, and where do the shares go if they ARE taken?


Answer
You do not have enough information here to really give a good answer. I just went thru a similar event. Here are the questions, if you want to reply, I may be able to help you.

What is the value of her 30% of the company. Recently if it is under 5 million there is no estate(gift) tax?
Was there a buy sell agreement with the folks that own the other 70%?
What did her will say was supposed to happen to the shares?
Is there kids/heirs involved?
You said the share would be TAKEN, by whom?

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Phirun


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Answer
No, don't get her any make up. Make up is for clowns, not real women. When I was in high school I loved funny stuffed animals. Get one that will remind her of you.




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