Legal Updates & Commentary for Tax & Estate Planning
In general, self-employed individuals are subject to employment taxes on their net earnings.
The wages paid to individuals who are non-owner-employees of a business are also subject to employment taxes, regardless of how the business is organized.
The shareholders of a corporation are not subject to employment taxes in respect of any return on…
Many of our posts this year have considered some of the unique issues that are presented by a partner’s contribution of property to a partnership, including the application of the “disguised sale” rules. Today, we will review one aspect of a recent IRS ruling involving a partnership’s assumption of liabilities in connection with a partner’s…
It should come as no surprise to readers of this blog that I am not enamored with the notion of issuing equity to employees of a closely-held business. It’s not that these individuals should not be rewarded for their efforts and contributions to the growth, success and stability…
The IRS continues to issue guidance in the much debated area of corporate spinoffs. A recently published ruling examined the federal income tax treatment of the two steps that comprise a so-called “north-south” transaction.” In doing so, it provides taxpayers with some welcome certainty.
A “north-south” transaction is one in which a parent corporation (…
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“Related Party” Transactions
Transfer Pricing
Valuations figure prominently in determining the proper tax treatment of transactions – such as sales, loans, leases, and performance of services – between related taxpayers, including, for example, commonly-controlled business entities.
The IRS is authorized to allocate items of income or deduction, or…
One word: “taxes.” There are so many transactions in which the tax consequences visited upon a closely-held business and its owners, and, therefore the true economic cost of the transaction, will depend upon the valuation of the business, its property, or its equity.
The following discussion highlights some of the more commonly-encountered situations in which…
One of the reasons often given in support of the elimination of the estate tax is the economic burden it imposes upon the closely-held business; specifically, the requirement that the 40% federal estate tax be satisfied within nine months of the death of the business owner. The imposition of a state “death…
It is a basic principle of federal tax law that a taxpayer cannot, for purposes of determining the taxpayer’s taxable income, claim a loss with respect to an investment in excess of the taxpayer’s unrecovered economic cost for such investment. If the taxpayer invested $X to acquire a non-depreciable asset – for example,…
It is a basic tax principle that the more a seller pays in taxes on the sale of its business, the lower will be the economic benefit realized on the sale; similarly, the more slowly that a buyer recovers the costs it incurs in acquiring a business, the lower will be the…
Last week, we reviewed the various U.S. federal income tax consequences that may be visited upon a foreign person who owns and operates U.S. real property (“USRP”). Today we will consider the U.S. federal gift and estate tax consequences of which a foreign individual must be aware when investing in USRP.
As you…
