No advice on this in the property transfer forum, so I was hoping to maybe get some thoughts by posting in the small business forum. Thanks in advance.
Ok guys, I am diving in. Been reading a bunch, and learning a lot just in case I need to go down this path. My business is seasonal, so I can't say yet if I can pull through this or not, but have been preparing just in case.
In February I sold an LLC that owns a retail business. 80% services / 20% product sales. Personal care business. My family member had taken a mortgage against their house to assist with the initial financing. The location means this business has potential. Every year for several years now there is a line on each of our tax return showing my old LLC taking an interest deduction for mortgage interest on her home, and her taking it as interest income. So there is a trail of their being a loan in place.
She formed an LLC, and took over the business. I am current on all of my personal bills, but unsure of the future based on a variety of issues that have arisen within my industry and other business dealings.
The purchase agreement between her company, and my old one states that for forgiveness of debts incurred against her house, and other debts (retirement funds), my LLC has sold her the assets in exchange for a release from those debts. We valued the business very fairly in my opinion, considering the economy, and type of business it is, as well as based off of its annual gross sales. She paid a significant bulk sales tax amount based off of that number.
I don't see an issue with waiting until after February of this coming year (if at all, depending on business) to file since I am currently up to date with all other bills, just to be on the safe side as far as preferential payments go, nd don't want this to be perceived as a fraudulent transfer as it wasn't, it was merely a way for me to focus on my other businesses, and for her to have something of value in exchange for the debt owed.
I met with a very reputable attorney in my area who made the recomendation to wait at least until February if I have to, and feels comfortable that it is a reasonable transaction.
I wanted to get some of your thoughts?
Thank you
Ok guys, I am diving in. Been reading a bunch, and learning a lot just in case I need to go down this path. My business is seasonal, so I can't say yet if I can pull through this or not, but have been preparing just in case.
In February I sold an LLC that owns a retail business. 80% services / 20% product sales. Personal care business. My family member had taken a mortgage against their house to assist with the initial financing. The location means this business has potential. Every year for several years now there is a line on each of our tax return showing my old LLC taking an interest deduction for mortgage interest on her home, and her taking it as interest income. So there is a trail of their being a loan in place.
She formed an LLC, and took over the business. I am current on all of my personal bills, but unsure of the future based on a variety of issues that have arisen within my industry and other business dealings.
The purchase agreement between her company, and my old one states that for forgiveness of debts incurred against her house, and other debts (retirement funds), my LLC has sold her the assets in exchange for a release from those debts. We valued the business very fairly in my opinion, considering the economy, and type of business it is, as well as based off of its annual gross sales. She paid a significant bulk sales tax amount based off of that number.
I don't see an issue with waiting until after February of this coming year (if at all, depending on business) to file since I am currently up to date with all other bills, just to be on the safe side as far as preferential payments go, nd don't want this to be perceived as a fraudulent transfer as it wasn't, it was merely a way for me to focus on my other businesses, and for her to have something of value in exchange for the debt owed.
I met with a very reputable attorney in my area who made the recomendation to wait at least until February if I have to, and feels comfortable that it is a reasonable transaction.
I wanted to get some of your thoughts?
Thank you
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