We have previously looked at the recognition period for built-in gains of S corporations, and the effect of the expiration of the temporary reduction of this period, under the American Taxpayer Relief Act of 2012, to five years. Earlier this week, however, the 
House Ways and Means Committee approved six “tax extender” bills to
Prodigal Son Redux? Balancing the Family Business and Bequests to Your Children
“There was a man who had two sons; and the younger of them said to his father, ‘Father, give me the share of property that belongs to me,’ and he divided his land between them. Not many days later, the younger son gathered all he had. . .and squandered his property in loose living
S Corps: Not Gone Yet
It has become relatively rare for an accountant or attorney to recommend the use of an S corporation for a newly-formed, closely held business. Instead, the LLC, taxable as a partnership, has become the entity of choice for most start-ups, and for good reason: it is a flow-through entity for income tax purposes, and it
Valuing a Family Investment Company? Proceed With Caution
One of the thorniest issues faced by the executor of an estate holding an interest in a closely- held business is the valuation of that interest. As if the preparation of the 
estate tax return was not daunting enough, the executor also has to determine the fair market value of the business interest. Although the
Spin-Offs, Split-Offs and Split-Ups: No IRS Ruling? No Problem.
In an earlier post, we discussed the issue of splitting up the family-owned corporation, on a tax-free basis, so as to enable siblings to go their separate ways.
PLR 117674-13
A recent IRS ruling considered the following situation: an S corporation (“Distributing”) had four equal shareholders, each of whom wanted to independently own and
Profits or Capital Interest?
A partnership is not subject to Federal income tax. Instead, an item of income or loss of the partnership retains its character and flows through to the partners, who must include such item on their tax returns. Generally, some partners receive partnership interests in exchange for contributions of cash and/or property, while others receive partnership
Need Capital? Closely Held?
A rapidly growing, closely-held business may find itself in need of additional capital. When the owners of such a business do not have the liquidity or disposable assets from which to provide such capital, and with traditional lenders often unwilling to extend the necessary credit on acceptable terms, many close businesses have turned to private
New York Business, the Federal Tax Return, and New York Domicile
We all know a story like Bill’s: Bill is a New Yorker that has built a successful business and has attained a level of financial security. His kids are grown, and have moved to the West Coast.
Bill decides that it is time to enjoy the fruits of his labor, preferably in a warmer climate.
Succession Planning: Several Ways to Skin A Cat
One of the issues most often encountered by the owner of a closely held business is succession planning. This may be especially difficult where no member of the owner’s family is involved in the business. In that case, the owner may have to consider the liquidation of his interest in the business, either by way
Deferring the Estate Tax: Section 6166
When the owner of a closely-held business dies, his or her estate immediately encounters what may be a major challenge: liability for the estate tax resulting from the value of the decedent’s interest in the closely-held business. In general, this tax must be paid within nine months of the decedent’s death, and it is often