Hi All,
Nuts & bolts...
Own a Cafe with a 50/50% partner (LLC) Own the building/Land for which Cafe resides on with same 50/50% partner (S-Corp) Own another commercial rental property with same 50/50% partner
All business is being done in the state of Connecticut. Partner and I have decided to divorce on all business dealings. Agreement as follows:
I will buyout partenr on Cafe (LLC) and Building/Land (Corp) for $50,000.00 $15,000.00 Cash, and $1,000.00 per/month for 35 months (Promissary note, 3rd position on Building/land)(The Corp)
I will also "transfer" my interest in the commercial rental property to partner.
The Bank holding the 1st & 2nd mortgage on the building/land (corp) has agreed to "remove" partner from mortgages.
Private note holder for the commercial rental property has agreed to remove my name from that privately held note.
I have an attorney that has drafted documents that will/would accomplish the above. In those documents there is no specific mention of capitol gains taxes, only that each partner will be responsible for any and all debts associated with this transaction.
My question is:
Does anyone know if the IRS will view these transactions as a buy/sell where by capitol gains, or for that matter, any other tax implication(s) may affect us at closing?
Basically, we are removing my partners name from LLC and Corp, and I am removing my name from privately held mortgage on commercial property.
Thanks in advance for any replies...