question regarding distribution of proceeds from a sale

[ParrotMD]

What is the name of your state (only U.S. law)? NE
My late fathers estate contained a farm. The property was to be sold and the proceeds to be distributed equally between 5 beneficiaries. Negotiations with a buyer have broken down. Two of the beneficiaries have decided to purchase the property. Are they still entitled to the 1/5 share from the sale?

 

[Zigner]

What is the name of your state (only U.S. law)? NE
My late fathers estate contained a farm. The property was to be sold and the proceeds to be distributed equally between 5 beneficiaries. Negotiations with a buyer have broken down. Two of the beneficiaries have decided to purchase the property. Are they still entitled to the 1/5 share from the sale?

If you want to look at it that way...yes.

 

[OHRoadwarrior]

I suggest they take it as a 2/5 discount off the sale price if that can be arranged.

 

[Ohiogal]

What is the name of your state (only U.S. law)? NE
My late fathers estate contained a farm. The property was to be sold and the proceeds to be distributed equally between 5 beneficiaries. Negotiations with a buyer have broken down. Two of the beneficiaries have decided to purchase the property. Are they still entitled to the 1/5 share from the sale?

How much is the property worth/appraised? Divide that amount by 5. Multiply by three. That gets you the amount for which the beneficiaries should purchase the farm. That amount used to buy the farm is then split among the three nonbuyers. Hence, everyone has an equal portion of the farm.

 

[Zigner]

Both of which work out to the 2 purchasers receiving a 1/5 share

 

[tranquility]

There are many ways to make the deal "fair" to the beneficiaries and to the IRS. (For a non-arms length sale.)

Once the price is decided upon fairly, the beneficiaries deserve their share.

 

[LdiJ]

What is the name of your state (only U.S. law)? NE
My late fathers estate contained a farm. The property was to be sold and the proceeds to be distributed equally between 5 beneficiaries. Negotiations with a buyer have broken down. Two of the beneficiaries have decided to purchase the property. Are they still entitled to the 1/5 share from the sale?

If they buy the whole property for the full listing price, yes, they would be entitled to 1/5th. If they are merely buying out the shares of the other parties, then they would not be paying themselves for their shares, so no.

Example: Property is worth 500k and that is your listing price. If they buy it for 500k, then they are entitled to their share. However, it would be really odd for it to be done that way. Normally they would be buying out the other three parties therefore they would buy you out at 300k, and they would not receive any share of the proceeds.

 

[Zigner]

If they buy the whole property for the full listing price, yes, they would be entitled to 1/5th. If they are merely buying out the shares of the other parties, then they would not be paying themselves for their shares, so no.

Example: Property is worth 500k and that is your listing price. If they buy it for 500k, then they are entitled to their share. However, it would be really odd for it to be done that way. Normally they would be buying out the other three parties therefore they would buy you out at 300k, and they would not receive any share of the proceeds.

Tomato/Tomato.

 

[LdiJ]

Tomato/Tomato.

Zig....

The OP specifically asked if the two buyers would be entitled to a 1/5th share of the proceeds from the sale. That is not a tomato/tomato situation.

 

[Zigner]

Zig....

The OP specifically asked if the two buyers would be entitled to a 1/5th share of the proceeds from the sale. That is not a tomato/tomato situation.

No, the OP did not.

Are they still entitled to the 1/5 share from the sale?

ETA: I only posted this because you're stuck on semantics.