Accountants....question for you

by a searcher from University of Pennsylvania - The Wharton School

4 months ago

Hello!

I was speaking with a seller who just last week bought out her 50% partner (her sister).  Involves real estate + OpCo.

Seller told me that, as part of the deal, she agreed not to sell the business for 2 years bc it would provide tax benefits to her sister (her former partner).

I have not heard of anything like this, but would not be surprised if there was something in the tax code addressing it.

Can anyone provide any colour? 

Thank you!

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3 comments

professional from Harvard University

Two years is often a period that keeps you safe from the step transaction doctrine (a branch of the substance over form doctrine that collapses multiple step transactions into one for tax purposes), but hard to say without more detail if it's that (and what the underlying transaction generating the worry is, if yes) or something else.

4 months ago | like reply | 0 likes

searcher from Harvard University - Harvard Business School

Following this thread as I'm always curious to hear how folks are going about providing tax efficient terms to sellers.

4 months ago | like reply | 0 likes

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