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Started By
Message
Selling Shares / Taxes
Posted on 8/30/18 at 12:50 pm
Posted on 8/30/18 at 12:50 pm
I own a share of the company I work for, it's a small family owned business,nothing huge.
The family came in & said they were going to buy out all shares owned by employees.
They will be writing us a check, just like they would be paying any other bill.
Taxes will be our responsibility to pay.
I asked what would I get to show the amount of money I needed to pay taxes on.
I was told the full 4k(for example).
I paid 2k for the share, why would I pay taxes on 4k? Shouldn't I only pay taxes on the earnings?
They will not be providing anything other than a check, so we will not get a 1099.
I appreciate any feedback, I just think something it not right with the way this is being handled.
TIA
The family came in & said they were going to buy out all shares owned by employees.
They will be writing us a check, just like they would be paying any other bill.
Taxes will be our responsibility to pay.
I asked what would I get to show the amount of money I needed to pay taxes on.
I was told the full 4k(for example).
I paid 2k for the share, why would I pay taxes on 4k? Shouldn't I only pay taxes on the earnings?
They will not be providing anything other than a check, so we will not get a 1099.
I appreciate any feedback, I just think something it not right with the way this is being handled.
TIA
5
Posted on 8/30/18 at 12:54 pm to LSUJML
quote:
I was told the full 4k(for example).
I paid 2k for the share, why would I pay taxes on 4k?
What you sold it for minus what you paid for it. You are correct.
quote:
They will not be providing anything other than a check
They have to.
Posted on 8/30/18 at 1:24 pm to LSUJML
Total proceeds - less what you paid for the share - your taxable gain.
If it is a Louisiana company, you may qualify for a partial exclusion from LA tax on the gain. Depends on how long you owned the stock for and how long the company has been in Louisiana.
If it is a Louisiana company, you may qualify for a partial exclusion from LA tax on the gain. Depends on how long you owned the stock for and how long the company has been in Louisiana.
Posted on 8/30/18 at 2:37 pm to LSUFanHouston
I bought it in 2013 & company was started in LA in the 60's.
How would I qualify for tax exclusion if there is nothing provided to me as far as records?
HR has confirmed they did nothing as far as income reporting for previous employees that sold their shares.
How would I qualify for tax exclusion if there is nothing provided to me as far as records?
HR has confirmed they did nothing as far as income reporting for previous employees that sold their shares.
This post was edited on 8/30/18 at 3:18 pm
Posted on 8/30/18 at 3:26 pm to LSUJML
LINK
Take a look at this regarding the exclusion. Not too hard to follow.
They should be issuing a 1099-B for the sale of the stock, but that's on them, not on you. You don't need that to determine your gain if you know what you paid for it and you know what your proceeds upon sale are.
Take a look at this regarding the exclusion. Not too hard to follow.
They should be issuing a 1099-B for the sale of the stock, but that's on them, not on you. You don't need that to determine your gain if you know what you paid for it and you know what your proceeds upon sale are.
Posted on 8/30/18 at 4:39 pm to LSUFanHouston
Thanks!
Posted on 8/30/18 at 8:23 pm to LSUJML
quote:
They will not be providing anything other than a check, so we will not get a 1099.
They're legally required to, but that is their problem. At any rate, you pay tax on the gain, not on what they pay you.
What bothers me is that if you own a share of the company, you don't have to sell. You are under no obligation to do so just because the family wants to buy you out. However, you may be in a situation where it's better to let them get away with it. Minority owners of small businesses generally get screwed.
Posted on 8/31/18 at 2:21 pm to LSUJML
quote:
The family came in & said they were going to buy out all shares owned by employees.
I'd respond with "That sounds great, but I like owning a share and mine is not for sale." or "Excellent, mine will cost you $6,000"
Posted on 8/31/18 at 9:37 pm to BrotherEsau
quote:It's not uncommon to have buy back stipulations when offering shares of company.
I'd respond with "That sounds great, but I like owning a share and mine is not for sale." or "Excellent, mine will cost you $6,000"
Posted on 8/31/18 at 9:47 pm to castorinho
Let’s be honest, do you think they included those in there if they don’t know they are supposed to file a 1099-b?
Posted on 8/31/18 at 11:17 pm to LSUJML
If there is no 1099 then how will the IRS know you sold the stock?
It sounds as if the owners are trying to do you a favor but leaving it up to you to figure that out. If you want to include the net income in your taxes then that is your option.
You’re probably talking about less than $440; $2k gain x 22% marginal tax rate if your taxable income is > ~ $77k & < whatever the next bracket amount is. That’s for married, filing jointly.
Edit: It’s probably less than that, forgot about capital gains. I thank that’s at 15%, so $300 owed in taxes.
Edit #2. I believe if your taxable income is < ~ $77k, then the capital gains tax rate is 0%. If that is correct and you are in that tax bracket then you owe no federal taxes on the gain.
It sounds as if the owners are trying to do you a favor but leaving it up to you to figure that out. If you want to include the net income in your taxes then that is your option.
You’re probably talking about less than $440; $2k gain x 22% marginal tax rate if your taxable income is > ~ $77k & < whatever the next bracket amount is. That’s for married, filing jointly.
Edit: It’s probably less than that, forgot about capital gains. I thank that’s at 15%, so $300 owed in taxes.
Edit #2. I believe if your taxable income is < ~ $77k, then the capital gains tax rate is 0%. If that is correct and you are in that tax bracket then you owe no federal taxes on the gain.
This post was edited on 8/31/18 at 11:40 pm
Posted on 9/1/18 at 9:03 am to nctiger71
quote:tax evasion is a favor?
If there is no 1099 then how will the IRS know you sold the stock?
It sounds as if the owners are trying to do you a favor
Posted on 9/1/18 at 10:28 am to castorinho
Good point, could have worded that better.
Posted on 9/1/18 at 12:49 pm to castorinho
Another option is to report the company owner for tax evasion as a whistle blower. If your info provides a large settlement then you can get a % of the taxes recovered.
Posted on 9/1/18 at 8:58 pm to nctiger71
quote:
You’re probably talking about less than $440; $2k gain x 22% marginal tax rate
2k gain was an example
Gain will be over 10k, less than 15k
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