I'm a partner in a private LLC for 7 years.
A publicly traded Small Cap corp buys the LLC in 2022-10-30, but it's structured as a merger.
All equity holders get
- 80% cash consideration
- 20% shares of restricted common stock, fully vested immediately, but I can't trade on it for 1 year (lock-up). I did not retain any ownership in the new company
When do i need to pay Long term capital gains on 20% stock
- 2022 (even though i can't sell it) - " tax without cash, in absence of 1099-B".
- 2023 (when i have ability to sell it, even if i didn't sell it this year)
- Only in years the shares are sold (a tax-deferred rollover)
the merger agreement and rollover execution docs from the deal provide no explicit guidance, aside from simple and obvious fact that The parties acknowledge receipt of New Interests by Rollover Participant is a taxable transaction for U.S. federal income tax purposes.
