Capital Gains Tax-share sale vs selling assets

garryscott

New Forum Member
REIN Member
Sep 24, 2007
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#1
I am a 50% shareholder in a company that owns a commercial building. In addition to rental income we run a business that generates positive cash flow each month and growing. We bought the property and started the business in 2005. We had a minimal investment and it is now worth considerably more. my partner (shareholder) is moving and he wants to sell his shares and I want to buy them, the problem is arriving at a fair price and part of the discussion is minimizing the tax consequence to him when he sells his shares. The less tax he has to pay the better the deal I can make.We have options on how to do this. The company that owns the property could redeem his shares and then I would be the sole owner. Or we could sell the assets of the company to one of my other comapanies or we could have one of my other companies buy his shares. the list of options goes on but what is the best way to handle this. Has anybody got any suggestions.
 

George

Inspired Forum Member
Registered
Sep 29, 2007
130
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#3
Good morning,

As you indicated you have a variety of options and there are a wide assortment of factors to consider that will be critical in this analysis. I highly recommend discussing this with your accountant as he/she will in a much better position to advise you since they will have full access to all of the relevant information. Bouncing this off of your lawyer will also be needed as part of the process.

Warm regards...

George