6 ms·

Why would the IRS want to own and manage family businesses?

myblake 10y ago
I think the suggestion is that they'd merely own part it, but nonetheless it's not surprising the irs would prefer liquidity.
- jsprogrammer 10y ago
  The IRS wouldn't want to own any part of a business. There is no reason for them to.
joncalhoun 10y ago
They wouldn't, and the original poster isn't implying that they would. I believe the argument here is that if the government wants to claim that these shares have a certain monetary value for tax purposes, then the government should stand behind that value and allow you to pay taxes with those shares at their claimed monetary value. The end goal would be to prevent small business (or people with stock options) from going under because the government claims a piece of paper is worth $1m, but in reality it can't be sold at all, or couldn't be sold for such a high value. If the government claims "oh but we would lose 20% of the value in selling these shares" then they are essentially admitting that they overvalued them when taxing you.
- arcticbull 10y ago
  Further, I believe that is an option (requirement?) when paying your renunciation tax on abandoning US citizenship. You're required to pay taxes on all your assets as though they were liquidated that day, and to cover the case of illiquid assets such as employee stock options. [1] In this case they will take 30% of the value of the shares at time of disposition. This is something employees holding ISO and NSO could be allowed to opt into on exercise when there is a spread between FMV and strike. [1] http://www.renunciationguide.com/expatriation-and-tax-details-of-current-law/exit-tax-on-renunciants/ http://www.renunciationguide.com/expatriation-and-tax-detail... (Tax on deferred compensation and non-grantor trusts)
- ubernostrum 10y ago
  Or we could do away with the idea of giving people stock that they can't ever legally sell.

I think the suggestion is that they'd merely own part it, but nonetheless it's not surprising the irs would prefer liquidity.

jsprogrammer 10y ago
The IRS wouldn't want to own any part of a business. There is no reason for them to.

joncalhoun 10y ago

They wouldn't, and the original poster isn't implying that they would. I believe the argument here is that if the government wants to claim that these shares have a certain monetary value for tax purposes, then the government should stand behind that value and allow you to pay taxes with those shares at their claimed monetary value. The end goal would be to prevent small business (or people with stock options) from going under because the government claims a piece of paper is worth $1m, but in reality it can't be sold at all, or couldn't be sold for such a high value. If the government claims "oh but we would lose 20% of the value in selling these shares" then they are essentially admitting that they overvalued them when taxing you.

arcticbull 10y ago
Further, I believe that is an option (requirement?) when paying your renunciation tax on abandoning US citizenship. You're required to pay taxes on all your assets as though they were liquidated that day, and to cover the case of illiquid assets such as employee stock options. [1] In this case they will take 30% of the value of the shares at time of disposition. This is something employees holding ISO and NSO could be allowed to opt into on exercise when there is a spread between FMV and strike. [1] http://www.renunciationguide.com/expatriation-and-tax-details-of-current-law/exit-tax-on-renunciants/ http://www.renunciationguide.com/expatriation-and-tax-detail... (Tax on deferred compensation and non-grantor trusts)
ubernostrum 10y ago
Or we could do away with the idea of giving people stock that they can't ever legally sell.