Federal Tax Issues

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“One Day, Lad, All This Will Be Yours.”

Many a closely-held business was created before its founder became a parent or when the founder’s children were still very young. As the business grew, and as the founder’s children matured, the founder may have entertained the notion of eventually having her children take over the business.…

Related Party Expenses

It is not unusual for one close corporation to pay the expenses incurred by a related corporation or business. There are many circumstances in which such a payment may occur, but they share one overriding theme: the related corporations view themselves – or, more properly, their owners view them – as a…

Hail the Partnership! Don’t Abuse It.

Of all forms of business enterprise, the partnership (or an LLC treated as a partnership for tax purposes) is most often cited by tax practitioners as the most attractive vehicle for operating a business. Indeed, partnerships permit taxpayers to conduct joint business (including investment) activities through a very flexible…

In earlier posts, we discussed how the division of a closely-held, corporate-owned business may be effected without incurring an income tax liability for either the corporation or its shareholders. The ability to effect such a division on a tax-efficient basis may be especially important in resolving a dispute between shareholders who may have already…

“Tax-Free” Basics

In general, gain or loss must be recognized upon the exchange of property by a taxpayer if the new property differs materially, in kind or extent, from the old property.

The purpose of the so-called “reorganization” provisions of the Code is to except from this general rule certain specifically described corporate exchanges that…

Make sure you check out Part I before reading below…

The Bigger Picture

In addition to the SCIN-specific issues, the complaint touches on a number of themes of which every estate-planning adviser – and every client – should be aware.

The Facts Matter

An adviser should assume that the IRS will scrutinize the estate plan…

What would you do?

The decedent was an extremely wealthy man, with a net worth in excess of $3 billion. You are the executor of his estate.

Prior to his death in 2009, he retained one of the top tax firms in the country to review his existing estate plan.

Under his existing plan, which…

A law suit was recently filed against the U.S. in which the Taxpayers seek a refund of gifts taxes and interest that they claim were erroneously assessed against them by the IRS for their 2007, 2008 and 2009 tax years (the “Tax Years”).

Although it may be some time before the Taxpayers’ claims are resolved, the factual setting upon which the disputed taxes are based is a commonly recurring one.

It is also one that highlights the importance of recognizing the various contexts in which the equity interests in a closely-held business are valued, how they may impact one another, and the importance of being able to distinguish among them.

Family Transfers

Taxpayers are shareholders of Company, an S corporation, the shares of which (the “Shares”) are owned by members of the Taxpayer Family and certain key employees and directors of Company.
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Continue Reading Fair Market Value? For What Purpose?

What’s the first thing that comes to mind when you hear that someone has engaged in a like-kind exchange? Real property, right? A taxpayer who owns a rental building with commercial and/or residential tenants exchanges the building for another rental property, usually as part of a deferred exchange. Or, a taxpayer that owns a building…