I'm purchasing an existing business with a business partner. They're in a better position than I am regarding liquid assets. I've got most of my assets in positions where I'd be paying high short term gains tax or other penalties to liquidate them now vs. in a few months.
General facts:
- Business purchase price $200k
- We'd form an LLC and purchase the existing business's assets
- We'll be 50/50 owners
- We work together already today. My business partner pays me as a 1099 contractor and that work will continue.
- I can quite easily liquidate $50k today towards the purchase price
- My business partner is willing to give me a 0% loan of the remaining 50k of my half the purchase price.
- That loan would then be paid off with some portion of my pay from the usual 1099 work. Payoff would be very fast at that rate.
Now, my question - two, actually:
- Is that 0% loan taxable in some way at the time I receive it?
- My understanding is that I'd be paying the loan off with post-tax money (which for me means fed + state + self-employment tax; it's a lot). Is there some subtly different way to structure this to minimize my personal tax burden in this case?
I will, of course, get an accountant to look at all this. But I'd like to go into that meeting prepared with the right questions to ask and general literacy in the subject, so I'd very much appreciate any direction ya'll can give me.
