February 2025

Carving Out Personal Goodwill in Father-Son S Corp Transfers

Avoiding the “Immediate Tax vs. Installment Payments” Mismatch by Carving Out Personal Goodwill Introduction When an S corporation owner (e.g., a father) wants to sell the entire business to his child (the son) using installment payments, common tax structures—like IRC §336(e) or §338(h)(10) “deemed asset sales”—often force immediate recognition of the entire built‐in gain, creating […]

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