Re:We Spent $3.3M Buying Out Investors: Why and How We Did It
by charlesdm on Thursday August 30, 2018 @04:11AM
(#17874882)
It's also tax efficient. Taking out $2.5m would first incur corporate tax, then dividend tax.
They initially sold equity of the business, only incurring capital gains tax in their personal name. Now they buy back shares and destroy those shares, so their stake increases again. They bought back shares with taxed capital within the company, but without incurring dividend taxes.
They initially sold equity of the business, only incurring capital gains tax in their personal name. Now they buy back shares and destroy those shares, so their stake increases again. They bought back shares with taxed capital within the company, but without incurring dividend taxes.