Own stock in a private company and looking for some advice?

Question

the company I used to work for may be purchased by a public company soon and I am wondering what to expect and how to prepare for when and if that happens. I have stock (not options).

Answer 1

Generally, the take over company will offer above market price for the purchase of outstanding stock of the company being taken over.

Answer 2

Depending on how any purchase is structured, your shares will be exchanged for either cash, shares of the acquiring company, or a combination of cash and stock. The tax implications vary greatly. If you only receive shares of the acquiring company, you would not be taxed until you sell part or all of them. If you receive cash, you will be taxed according to the value at the time you purchased or were gifted the shares (if gifted, your cost basis is $0). Determining the value of shares in a privately held company can be tricky. You should consult a tax expert for your best course of action.