My $3.3M Mistake

Re:My $3.3M Mistake by vaksel on Wednesday May 27, 2009 @11:10AM (#628550)

I don't get it...didn't you need to file before that point? Wouldn't you have found out this info the first year you paid taxes? At which point you would have just been starting out, and the "buyout" would have been for pennies since the company wasn't showing profit

[ Parent | on HN ]

Re:My $3.3M Mistake by bobbyi on Wednesday May 27, 2009 @11:49AM (#628614)

How would his taxes have reflected the percentage of this company he owned? You pay taxes on your income, which wouldn't be affected here. You pay capital gains tax on stock when you sell which he didn't do at any point.

[ Parent | on HN ]

Re:My $3.3M Mistake by mediaman on Wednesday May 27, 2009 @12:34PM (#628683)

When you are a stockholder in a company -- LLC or subchapter S corp -- you prepare a K-1 for the owners in the firm, who each pay taxes on the passthrough income.

In order to calculate personal tax due, the form includes the percentage ownership, which is also reported to the IRS.

So the commenter is correct; I'm not sure why this wouldn't have been discovered earlier, unless he wasn't doing his taxes (even if there's a loss, taxes should be filed to claim carryover losses).

[ Parent | on HN ]

Re:My $3.3M Mistake by Retric on Wednesday May 27, 2009 @02:26PM (#628897)

If he had 3.3 million to buy out the company he probably was not filling out his own taxes.

[ Parent | on HN ]

Re:My $3.3M Mistake by vaksel on Wednesday May 27, 2009 @11:56AM (#628626)

It wouldn't...but it should have given him a headsup that he doesn't own 90% of his company early on. Early enough, so that if he decided to "buy" his dad out, it would have been for a much smaller amount.

[ Parent | on HN ]