@sjrcpa thank you very much for your quick response. so for the purpose of filing a Gift tax return, i will state: 49 shares times $30K each less $10 as the gift value?

on company's Balance Sheet i would assign 49% of Father's equity to Son as of 1-1-18. Father's basis was only $10K as he was distributing most of the profits.  does it make a difference? do i need to make adjustments to the basis to account for valuated share price?

does Son need to report an acquisition of shares on his tax return anywhere? or just K-1 is all he needs?

should Son have filed election of section 83(b)? how would this have worked for him?


@rbynaker i sense sarcasm in your message. what should they have done differently? is there anything they can do now to remedy this situation?

i appreciate your time and help. i am new in this area and your expertise is invaluable to me.