Orlando, FL asked in Tax Law for South Carolina

Q: Do I have to pay state taxes on a partner buyout distribution and which I was considered 10% owner of my concept

I previously worked for Bloomin’ brands and had a five-year contract in which I had to put $25,000 in and then received 10% of the bottom line every month. At the end of my contract, I was bought out of my 10 percent share, which ended up being about $72,000. This occurred back in 2012 and now my distribution is getting ready to be paid out to me in December. My question is do I have to pay state tax on this distribution, or just federal, and how does the tax work on a partner buyout that was delayed five years ? I live in Florida but work out of SC

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1 Lawyer Answer

A: Income on receipt reduced by capital contribution of $25k taxed by federal and state.

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