Is there a way of not being double taxed?

Question

I was approched by my cousin to buy some shares in a new company a while back. The shares were sold to family members only. My best fiend wanted to make a contribution also, so he matched mine, and we bought shares under my name. The company has done well, and they are about to sell for a substancial profit (4 million) for our shares. My question is what is the best way to give my friend his half, I assume I'll end up paying taxes on the entire amount, but when he get's his half will he have to pay taxes on that?

Answer 1

The amount of gain involved calls for you to hire an experienced tax professional such as an attorney or CPA. I suggest that you do not rely on any advice posted in response to your question. Your question has both ownership and possibly gift ramifications that are too complicated for this forum. Make sure you get a representation letter from the professional you hire.  

Answer 2

you were a nominee for your friend

get the two of you to a tax advisor quickly to get this settled properly

Answer 3

A tax advisor might be a good plan.

What it will end up being is a nominee, and, depending on the amount, you might need to fill out a 1099 for your friend.

Or, you can just have a mutual agreement that he pays half of the tax out of his profit.

The tax will be (Sales - basis, what you bought it for) times marginal tax rate (your tax bracket) if it is short term gain, long term gain has its own tax rates.