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Taxes on Equity Compensation

by SparksZilla on 11/20/19, 12:59 AM with 1 comments

  • by throw555away on 11/20/19, 1:29 AM

    Forgive the throw away, but I am in the middle of this now

    I purchased a domain for my business 10 years ago

    The domain cost $500,000

    The business did well for a while, but eventually died

    Someone just offered to buy the domain

    The offer is $1 million

    But he is offering $1 million in preferred stock in a new company as if I was an investor.

    He says that the company is worth $10 million

    So I would be getting 10% ownership of the company - no cash.

    Do I have to pay taxes on this or can I wait until the stock is public or the company if acquired?

    Should I ask for stock option instead?

    How do I ensure I do not lose the domain?

    Should I lease it for X years with option to buy to ensure if the company goes bankrupt it would not be seen as an asset? Would leasing affect my taxes?

    Thank you