Legal Updates & Commentary for Tax & Estate Planning
As the country begins its hoped-for recovery from the disruptive economic effects of the COVID-19 virus – or, more accurately, from the measures implemented by government to contain the spread of the virus – some closely held businesses will emerge relatively unscathed while others will not survive,…
A couple of years ago, this blog carried an article that briefly considered whether the gain realized by a taxpayer on the sale of a contract should be treated as ordinary income or capital gain for tax purposes.[i]
As it turned out, that piece has been one of the most popular articles that we…
Imagine, if you will, the owner of a closely held business. Although the business has done well, the owner believes they can take it to the proverbial “next level” by dedicating another five years of intense effort and some additional investment, following which they will try to sell the business.
After learning of this “plan”…
If you’ve been representing closely held businesses long enough, then the “conversation transcribed” below should sound familiar to you.
I have had several versions of this exchange in the last few months.[i] The common theme? The risk that the IRS may not accept one or more steps in the transaction at their “face value,”…
In theory, the primary purpose of the income tax, as a body of law, is to raise from the governed the resources that the government requires in order to perform its most basic functions.[i] However, as society has evolved and its needs have changed, and as “the economy” has become more…
Yesterday, in Part I, we reviewed the like-kind exchange rules. https://www.taxlawforchb.com/2019/04/deferring-real-property-gain-like-kind-exchange-or-opportunity-fund-part-i/
Now we turn to the new kid on the block.
The Act added Section 1400Z-2 to the Code, which allows a taxpayer to elect to temporarily defer the recognition of gain from the disposition of property which is reinvested in a…
Among the business transactions on which the Tax Cuts and Jobs Act[i] has had, and will continue to have, a significant impact is the disposition of a taxpayer’s interest in real property, whether held directly or through a business entity.
That is not to say that the Act amended an existing Code…
A lot has been written about the tax benefits of investing in a Qualified Opportunity Fund. Some have suggested that the gain from the sale of a closely held business may be invested in such a fund in order to defer the recognition of this gain and to shelter some of the appreciation thereon.
In…
One of the most challenging problems facing a business is how to attract, and then retain, qualified employees.[i] The competition among businesses can be fierce and, in order to succeed, businesses have, over the years, developed a number of compensation alternatives. Some of these have become “standard” options,[ii] thereby forcing…
It sounds relatively simple:
A distribution of property made by a regular “C” corporation to an individual shareholder with respect to the corporation’s stock[i] (a) will be treated as a dividend[ii] to the extent it does not exceed the corporation’s earnings and profits; (b) any remaining portion of…
