Brad is the majority shareholder of BR Corporation, a family-owned company. The corporation has two different businesses:
Question:
Brad is the majority shareholder of BR Corporation, a family-owned company. The corporation has two different businesses: a shoe store and an ice cream shop. Andrew manages the shoe store, and Ashleigh manages the ice cream shop. Andrew and Ashleigh are siblings, and the two businesses have equal value. Brad owns 60% of BR; Andrew and Ashleigh each own 20%. Brad would like to transfer ownership of BR to Andrew and Ashleigh, but the siblings do not get along. Brad is afraid that BR will deteriorate if Andrew and Ashleigh share joint ownership. He wants to begin the process of transferring ownership to his children but is not prepared to surrender control to Andrew and Ashleigh quite yet. What type of reorganization could be used in this case, and how much should be owned by Brad, Andrew, and Ashleigh?
Step by Step Answer:
South-Western Federal Taxation 2022 Corporations, Partnerships, Estates And Trusts
ISBN: 9780357519240
45th Edition
Authors: William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman