s-corp problems

[gee241]

I am hoping someone will have some information to help us.

We are in a family s-corp. We do not receive any dividens. The only thing we get is break when the Ranch has a loss. This year it made money and it cost us dearly.

We would like to take land out the the corp in exchange for our shares. Does anyone know how or has done this. There are four siblings and three of us want out. Can we do like in kind and take land. We would be willing to lease it back to corp. but at least we would be some return from our investment. We do not have vote to force this.

All the land was put in when the father passed away many years ago.

We have apt with an attorney so may get help there

Let me know if you have had any experience.

 

[norriscathy]

I am hoping someone will have some information to help us.

We are in a family s-corp. We do not receive any dividens. The only thing we get is break when the Ranch has a loss. This year it made money and it cost us dearly.

We would like to take land out the the corp in exchange for our shares. Does anyone know how or has done this. There are four siblings and three of us want out. Can we do like in kind and take land. We would be willing to lease it back to corp. but at least we would be some return from our investment. We do not have vote to force this.

All the land was put in when the father passed away many years ago.

We have apt with an attorney so may get help there

Let me know if you have had any experience.

BIG, BIG, BIG, BIG problem when you try to take appreciated assets out of a corporation. When a corporation distributes assets that are appreciated it is the same as if the corporation sold you those assets and since you are an S-Corp YOU will pay income taxes on the gain! If your father put the land in at $100 per acre and you now want to take it out when it is worth $1000 per acre the "S" stockholders will pay income taxes on the $900 per acre profit enen yhough you still own the land. NEVER, NEVER, NEVER put real estate (or anything else that will appreciate) in a Corporation. Corporations have very little real usefulness any more and are full of snake pits! If you must have other owners operate as a partnership or LLC/partnership; then you could probably take the land out with little or no tax consequences.

Norris

PS: If you're going to an attorney I sure hope it is a really high dollar ($250 per hour plus) tax attorney. 99% of all lawyers know less about the Internal Revenue Code that your local Wal Mart preparer!

 

[gee241]

What if they pay us for our shares and we reinvest it. We would buy land in Ga where we live. Then could we use like in kind think it is 1031.

thank you for post a reply gee

 

[norriscathy]

What if they pay us for our shares and we reinvest it. We would buy land in Ga where we live. Then could we use like in kind think it is 1031.

thank you for post a reply gee

You had better find someone well qualified to help you out!!!!!!!! Shares of stock are specifically EXCLUDED from the like kind exchange rules.You are NOT exchanging land, you own stock; the Corporation owns the land! See the problem?? Find yourself a wel qualified person to help; you've got a real serious problem.

Norris