Julie and her son, Wyatt, have been operating a neighborhood garden center. Julie formed the business in 1996 as a sole proprietorship, and it has been very successful. It currently has assets with a fair market value of $250,000 and a basis of $180,000. On the advice of her tax accountant, Julie decides to incorporate her business.

Because of Wyatt’s loyalty, Julie would like him to have shares in the corporation. What are the relevant tax issues?

Answer rating: 100% (QA)

First of all to convert a sole propreitorship there should be an agreem... View the full answer