I'm in the process of being pushed out of a business I co-founded (a US Corporation), and have decided to settle for $90k. $70k is them buying out my shares, and $20k will be to repay money I lent the business several years ago, which was never properly documented.
The sale agreement is for the whole $90k for them to buy my shares, and a separate accord terminates the loan.
Obviously I want to minimise the capital gains tax and not pay it on the whole $90k - is it possible to offset the 'cancelled' loan from the CGT? (Being that it's US and not UK based.)
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Logically you are selling your shares for $70k and your $20k loan is being repaid. How is it that the documents say something different?
“them to buy my shares”
Who are “them”?
I would also suggest that if you are about to receive $90k, albeit before tax, you can probably afford to pay an adviser to help you structure things in the most tax-efficient manner.
Folks here generally don’t take kindly to requests for free advice from the public. At a time when livelihoods are on the line, for both advisers and their clients, such requests are - I imagine - going to be treated with even greater disdain.
Don’t get me wrong. I’m one of those that would be willing to help but things are rarely as straightforward as they might seem.
You have assumed that the disposal of the shares will automatically be treated as a capital disposal. That isn’t necessarily the case, hence my query as to who “them” are.
In any event, if the disposal is a capital one, I suspect that there would be no recognition of the “loss” on the loan.
If it’s a sale to others then it should be capital. Checking that it wasn’t a buy back by the company/corporation