Mark Kohler breaks down what happens when you transfer ownership of a business. Asset sales reset depreciation and offer tax advantages to both buyer and seller, while stock or membership transfers can trigger hidden IRS reporting issues and leave liabilities attached. Spend an hour with a tax lawyer before transferring anything.
Chapters
If you're changing the ownership of your company, that means you're transferring the stock or shares or the membership. It's an llc. It's either gonna be a gift or a taxable transaction. You've got to get on a call with one of our tax lawyers for just an hour. You don't even know some of the red flags and landmines you might step on here. A lot of times, even if you're transferring to a family member, I wanna do a asset sale, not a stock or membership sale. Because they can reset the depreciation. It's better tax wise for them and can be for you as well. This is a taxable trans. You just can't say, I'm going to just transfer ownership. If you've already done it, please still get a consult because we might be able to unwind it, depending on what you've recorded somewhere or whatever. But please call the law firm and get an hour's conversation on this. So how do you change it? You do a membership transfer agreement. That's it. But it is going to have some reporting issues with the irs. Now, if you want to transfer the company so that they can keep all of that infrastructure in place, that's great. But there can be still latent liability up to the point of where the stock transferred, and so there's just a plethora of issues.
