"If you’re considering handing over the reins of your family business to your children, it’s important to understand the income, gift, and estate tax consequences. Careful planning can help prevent the need to sell some (or all) of the business assets to pay those taxes.
Below are some common tax-minimizing strategies:
Giving your interest outright: If you don’t need continued income from the business and you don’t want to retain control, you can simply give the business to your children outright. By transferring your interest in this manner, you may be able to transfer all or a significant portion of the business free from federal gift tax. The disadvantage here is the amount of time that may be needed to transfer your entire interest.
If you wish to transfer your business at your death, Section 6166 of the Internal Revenue Code allows any estate taxes incurred due to the inclusion of your family business in your estate to be deferred for 5 years and then paid in annual installments of interest and principal over a period of up to 10 years. Specific requirements must be met."
Read more at:
Mokosak: Transferring a business to your children | The Des Moines Register | desmoinesregister.com:
For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.
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