I founded a startup in late 2008, as a sole proprietorship LLC. I was the only member in the LLC. It stayed that way until August of 2011, less than a year ago, when I added a minority partner to the LLC. An Operating Agreement was put in place then (August 2011) describing the membership units held by each partner.
If I were to sell my company outright today, that is, sell the membership units together with my partner, would I be taxed for short term or long term capital gains for my portion of the membership units? I've been the owner of the company since 2008, so well over a year, but the actual membership units weren't defined until August 2008, less than a year ago.
My confusion is this: I've been the owner of the company for over three years, so it seems like I would be taxed at the long term capital gains rate (15% I believe). But since the membership units weren't defined until less than a year ago, would it actually be the short term rate? Thanks.