I am the owner of a S Corp with 100% share, I want to ask if I can transfer the shares to my brother-is there a gift tax ?
Can you tell me how I can find out the value and also How to start this process.
Commercial Real Estate Attorney
You can certainly transfer the shares. Depending upon the value of the shares, there may or may not be a gift tax.
I am an Illinois attorney and not sure about NC law so you should check with an accountant or tax lawyer in NC. However, your shares should be freely transferable as you are the 100% owner.
The federal annual gift tax exclusion for 2010 is $13,000. So you can transfer up $13,000 under federal law without needing to report. If over $13,000, then you begin to use up the $1 million lifetime exclusion and a gift tax needs to be filed. Some people do gifts over time - e.g. 1/2 one year and 1/2 the next. Or gift some shares to husband and some to wife to get $26,000 value transferred.
Make sure your brother is an eligible S-Corp. shareholder.
Your accountant will be able to help with valuation and gift taxes.