The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. Presenting a live 90-minute webinar with interactive Q&A Buy-Sell Agreements for Corporations and LLCs: Drafting Stock Redemption, Cross-Purchase and Mixed Agreements Navigating Complex Corporate, Tax, Estate Planning and Insurance Law Issues When Planning for a Business Transition Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific WEDNESDAY, JULY 12, 2017 Brian E. Hammell, Esq., Sullivan & Worcester, Boston Martin B. Robins, Partner, FisherBroyles, Chicago
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The audio portion of the conference may be accessed via the telephone or by using your computer's
speakers. Please refer to the instructions emailed to registrants for additional information. If you
have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
Presenting a live 90-minute webinar with interactive Q&A
Buy-Sell Agreements for Corporations and LLCs:
Drafting Stock Redemption, Cross-Purchase
and Mixed Agreements Navigating Complex Corporate, Tax, Estate Planning and Insurance
Law Issues When Planning for a Business Transition
Shareholder B Basis = $10,000 Shareholder B Basis = $1,010,000
Gain = $1,990,000 Gain = $990,000
Tax = $398,000 Tax = $198,000
*Assumes a 20% long-term capital gains rate
Deemed Dividend in Case of Redemption
The above example presumes that the redemption is treated as a sale or exchange under Section 1001 of the Code
› This is the general result for a complete termination of the retiring owner's interest
However, a potential trap exists under Section 302(b) of the Code
› A redemption payment to a retiring shareholder is treated as a distribution to the retiring shareholder with respect to his or her shares (and not in exchange for the shares) if the redemption does not satisfy any of the Section 302(b) tests (e.g., the retiring shareholder continues to own too many shares, actually or by attribution, after the redemption)
› Family attribution rules under Section 318 apply
Immediately after the distribution, the distributee has no interest in the corporation including an interest as an officer, director or employee, other than an interest as a creditor
The distributee does not acquire any such interest other than stock acquired by bequest or inheritance within ten years from the date of such distribution
The distributee files an agreement to notify the IRS of any acquisition described above