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:
Corporate attorneys usually think of trusts as estate planning tools: they are the vehicles through which the owner of a business may pass along to their family a beneficial interest in the business without actually giving them direct ownership in the business. The owner will transfer an equity (often non-voting) interest in the business by
Last week’s post considered the risk assumed by a taxpayer that ignores the plain meaning of a Code provision (the definition of “capital asset”) in favor of a more “rational” – favorable? – interpretation of that provision.
This week’s post considers the “plain meaning” of the same section of the Code: the definition of the
The Tax Cuts and Jobs Act[1] has now been in effect for fifty days. During this relatively brief period, many tax professionals have pored over the statutory language, as well as the Joint Explanatory Statement issued by Congress, and, in the process, have found provisions that are in need of
There is a problem that will sometimes plague the shareholders of an S corp that is going through challenging financial times. Whether because of a downturn in the general economy or in its industry, whether because of stiff competition or poor planning, the S corp is suffering operating losses. As if this
We’ve all heard about the profits that publicly-held U.S. corporations have generated overseas, and how those profits have, until now, escaped U.S. income taxation by virtue of not having been repatriated to the U.S.
It should be noted, however, that many closely-held U.S. corporations are also actively engaged in business overseas, and they, too, have
Perhaps the single most important day in the life of any closely held business is the day on which it is sold. The occasion will often mark the culmination of years of effort on the part of its owners.
The business may have succeeded to the point that its competitors seek to acquire it in
The Tax Cuts and Jobs Act of 2017[1] went into effect only two weeks ago. Many of its provisions represent significant changes to the Code, and it will take most of us several months to fully digest them,[2] to appreciate their practical consequences, and to understand how they may best be utilized