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Hello goons, I am trying to buy a couple of retail stores from my current employer. I live in Texas, and my current boss has offered to sell his stores to my brother and I for a little less than $1 million. Working with a business advisor provided by my city, I have worked out a business plan, a financial plan, and set up a business account with the IRS. My father in law is good with investing around $150k for a business loan to buy the business. My trouble comes from corporate: they want new owners to have $100k cash separate from the business loan for the purpose of buying into the corporation (and refurbishing the existing stores I imagine). My FIL has two rental properties he wouldn't mind selling to invest into this new business venture, but he doesn't want to lose money to taxes. My brother and I have been working on this business plan for a year now and this hurdle has me worried it was all a waste of time. My questions are: 1. Is it possible for my FIL to sell his rental properties without incurring taxes if he invests (or becomes a partner) in my business? 2. Do I need to make my FIL a partner in my company? He is very risk averse and does not want to lose his retirement money at age 70 because of my business. I recognize I will almost certainly need a lawyer and tax person to help me, I'm mostly posting here to get any advice about this so I don't waste any more time or money. Thanks, goons!
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Feb 27, 2022 18:22
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| # ¿ May 21, 2024 13:00 |
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Elephanthead posted:Are you actually getting assets or just buying goodwill? I would just start up retail from scratch and put your employer out of business the American way. We are getting assets, but a big chunk is goodwill. My brother and I have discussed opening a new store, but a big existing customer base is our main advantage in buying these old stores. Unless we're totally wrong? When I helped open a store for a different owner, it took probably 3 years for our customer base to develop to where I was happy with it. In our business plan, my brother and I were accounting for the customer base to try to reduce some goodwill. moana posted:If your FIL is able to do a cash-out mortgage on his rental properties or main home, that would be a way to avoid the cap gain taxes on selling the places. I was under the impression only a main residence was eligible for avoiding capital gains taxes, and figured if he sold his rental properties, he'd be subject to it. But a cash-out mortgage can avoid that? I should clarify: he owns these properties outright and has no mortgage on them. Would this still apply? Thank you so much for the help so far, I'll make sure to keep y'all updated!
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Mar 5, 2022 18:43
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