Legal Updates & Commentary for Tax & Estate Planning
There is a common theme that runs through the history of most closely held businesses. It begins with a motivated, diligent, and independent individual who is not afraid to take charge and to make things happen. Add a bit of luck to the mix, plus the support and guidance of family, friends…
“Personal liability?!” the client screams. “For sales tax? How is that possible?” The look on their face is at once incredulous and accusatory. “Didn’t you say that the LLC would protect me and my assets from the liabilities of the business so long as we respected ‘corporate’ formalities, and treated the LLC as a…
The following probably sounds familiar. You’re meeting with a new client who is being audited by the IRS. The client brings you their federal and state individual income tax returns and the income tax returns for their business entity.
You look at the client’s reported wages and dividends; you look at…
I recently encountered a situation in which the so-called “basis consistency” rule was implicated. This rule requires consistency between the estate tax value of a decedent’s property – its fair market value (“FMV”) as reported on the decedent’s estate tax return – that passes to a beneficiary, and the basis claimed by…
New York’s legislature has been in the news lately after having “rotated an avian creature through more than 90 degrees”[1] at Congress in response to the limitations passed under the Tax Cuts and Jobs Act on the deduction of state and local taxes. The provisions recently enacted by the State that have received the…
I had a call a couple of weeks ago from the owner of a business. His brother, who owned half of the business, owed some money to someone in connection with a venture that was unrelated to the business. The brother didn’t have the wherewithal to satisfy the debt and, to make matters worse, the…
How many times have you said to a client, “Please don’t agree to any deal terms until we’ve had a chance to discuss your goals and plans, consider your options, and analyze the consequences.”
How many times has a client presented you with a fully executed “letter of intent” – one that you’ve never seen…
The well-being of a closely held business is based, in no small part, upon a number of relationships, including, for example, its dealings with customers, suppliers, service providers, employees, competitors, and government (including taxing authorities). The cultivation, management, and preservation of these relationships presents the business with many challenges. However, if I…
I have often asked the question, “Why would someone willingly become a minority owner in a closely held business?” Similarly, I have often advised clients who control their own business not to admit a minority owner into the business.
In the face of my ill-concealed bias against one’s becoming a minority…
It is not unusual for the owners of a closely held business to also own a number of real properties. For example, they may own real property that:
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