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Transfer to 2nd Generation

MfgforGovMfgforGov subscriber Posts: 1
edited March 2009 in Growth Funding

1st Generation is ready to retire.  2nd generation has been running the business for 10 years, so there should not be any fall out due to transition. 


1st generation intends to leave all assets to 2nd generation, however they do need some funding to supplement to their income.  Business is coming down from ramp up to near $20 million in sales on govt contracts.  1990`s was mainly under $3 million/year in sales and hit or miss profits.  FY 2009 looks like +/-$10 million and 9-10% profit after tax.  Cash is strong.  Due to less govt spending in our sector, sales may drop as low as $5-6 million in FY11-??. 


What is most tax effective way to transfer? Gifting is being considered. 
In addition, where can I get a low cost, `IRS approved` evaluation for less than $3-5k. 
There are no capital requirments.  We can fund from personal assest and business revenue. 



  • patentandtrademarkpatentandtrademark subscriber Posts: 103
    question for estate planning lawyer
  • MfgforGovMfgforGov subscriber Posts: 1

    How are you incorporated and where? Nevada- S Corp
    I’d also like to clarify why you think that “they need some funding to supplement their income” if your cash flow is strong and “there are no capital requirements”. Do you mean that they need to raise capital in order to be able to buy you out? That would obviously put a different spin on what I mentioned above.   They need payments for thier shares from cash flow to suppliment retirement.
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