All Forum Posts by: Rohan Patel

When you bake in buying out the partner, factor that since they are not selling the property, that they are not paying approx 6% to 10% of the sales price which should be in your advantage regarding your offer.

Best of luck

Thanks Basit, good point to consider!

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Quote from @Austin Cheatham:

I think it depends on your goals here and this is likely more of a legal question than it is a tax question. Dependent upon the profit of the business, one idea you could run is an S Corp for operating side and an LLC for the real estate side. This sets you up for succession planning as well, if you ever wanted to sell the gas station operations but maintain the real estate for the passive income that sets you up to do so easily. Rather than have them all in one corporation/LLC.

Happy to discuss your goals or plans if you want to reach out!

Thank you @Austin Cheatham, thats how it structured currently, operating is S corp and real estate is LLC. I will reach out!

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Quote from @Chris Seveney:

Quote from @Rohan Patel:

In the middle of buying out partner (50:50 partnership) in a mixed-use owner operated Gas station and real estate property. Buy out would be of two companies, first is operating company for the Business operations of gas station and second would be real estate under said gas station and some rental units. Haven't found much resources on how to structure the deal whether to buy out partner's shares at existing basis (I believe this wouldn't be advantageous as I wouldn't get to mark the asset to market and lose out on depreciation) or open new LLC or S-Corp and buy out both partners (I would end up taking gain tax due to sale but would get new dep. basis). Another issue is the gas station includes a liquor store so opening a new company to buy out business would mean losing the age of liquor license which may be beneficial in the future if they pass a law on permitting more liquor licenses to existing holders.

Can provide more info as needed but partnership buyouts seem uncommon and there are a few moving parts here, any advice would be appreciated.

The way I have always structured it is buying them out of the existing company. Granted it does not always have the greatest benefits but based on your situation I believe doing that is better than the liquor license issue. Just my 2 cents, I have bought people out before and that is how I did it. Not an attorney or CPA so cannot help on those items. Just sharing what I have done.

Thanks @Chris Seveney that's where I am leaning as well, keep it clean because I don't think its possible to revalue 50% assets that I buy and keep mine at same basis. Will have to revalue full company so buying out the existing company would make sense. I appreciate your advice!

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Can provide more info as needed but partnership buyouts seem uncommon and there are a few moving parts here, any advice would be appreciated.

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All Forum Posts by: Rohan Patel

Rohan Patel has started 1 posts and replied 4 times.

Post: Partner Buyout - Opinions Needed

Post: Partner Buyout - Opinions Needed

Post: Partner Buyout - Opinions Needed

Post: Partner Buyout - Opinions Needed