Q: What is the least expensive way to buy into an LLC with regard to Iowa and federal tax cost?
Father and two siblings put farm into LLC (split 50/25/25). One of the siblings is going to nursing home and selling their membership units (25%). An agreed price has been established for units. Should the LLC buy the seller's units and then sell them to me? OR Should I buy into the LLC first? What way will provide the least amount of taxes as an end result? LLC does not pay income taxes as it is operated as a partnership. Each partner is responsible for their share of dividends paid out. The question of how the allocation of taxable income and expense to the date of closing will be handled. With recent changes in the tax law on this issue, probably want to state specifically how much income or loss that is expected to be for ytd for the short years of buyer and seller.
A: You need to hire a professional. There's a few things in your question that are not correct in regards to how an LLC functions. You're going to need more detailed advice than should be given through this forum.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
