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14-Mar-2020 15:41

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Conclusion: B effectively “pays” 5,000 in after-tax net cost to “give” A 5,000 in after-tax net benefit.

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Assume A and B have non-competes with the S corporation, so that their “personal goodwill” belongs to the S corporation.However, this structure uses after-tax dollars and there is no increase in outside tax basis for the remaining stockholder.



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