We begin this week with the Senate having passed the President’s $1.9 trillion coronavirus relief and economic stimulus plan (the “American Rescue Plan”[i]) following a marathon session during which Senate Democrats tried to address the concerns of centrists within their own party,[ii] but without alienating more progressive members of
Today’s post briefly explores whether the term “corporate charity” is an oxymoron. It also tries to provide a framework for evaluating whether certain “charitable” activities should be undertaken by a business corporation. It is predicated, in no small part, upon the general premise that one must appeal to the corporation’s self-interest[i] in order to
Many employers struggle to hire and retain key employees. In addressing this challenge, employers will sometimes add unique benefits to the compensation package offered to such individuals. In fact, it is not unusual for the employer and the key employee to jointly structure the terms of such a benefit, often in
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 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
Constructive Dividends
In the last several weeks, I have seen a number of examples of what are commonly referred to as “constructive dividends,” including a corporation’s satisfaction of the personal expenses of its shareholders.
Unlike a regular dividend distribution, a constructive dividend does not involve the formal declaration of a dividend by the corporation, followed