Legal Updates & Commentary for Tax & Estate Planning
For the most part, the shareholders of closely-held corporations and their counterparts in the public realm are subject to the same set of federal income tax rules. However, there are situations within each of these two realms where unique policy or practical considerations dictate the application of different sets of rules.…
The owners of a closely-held business confront several issues upon the death of any one of them:
In most cases, the…
The owners of closely-held businesses are among the greatest benefactors of charitable organizations in this country. Although their contributions to charity are usually effectuated through the transfer of cash or marketable securities, it is often the case that the only asset available to satisfy an owner’s charitable inclinations is his or her interest in the…
It Happens All The Time
A business owner dedicates every waking moment to the growth and well-being of the business. Invariably, the owner is motivated, in no small part, by the desire to provide for his or her family. After years of effort, and maybe some luck, the business succeeds. The owner and his or…
Be sure to start with Part I, here!
Real Estate as an Active Business
The active conduct of a trade or business does not include the holding for investment purposes of land, or other property, or the ownership and operation (including the leasing) of real property used in a trade or business, unless the…
This is a question that we encounter with some frequency in the context of family-owned corporations, and the backdrop against which the issue arises is not uncommon.
In the Beginning
The older generation may have acquired a building many years ago, either as an investment that would generate a stream of rental income from unrelated…
It is not unusual for a closely-held business or for its owners to issue or transfer equity in the business to a third party in order to raise necessary funding for the business or to secure the services of someone with a certain expertise. In most cases, where the equity transfer is made by the…
Don’t miss Part I, here!
Taxable Gift Transfers
In general, where property is transferred for less than an adequate and full consideration in money or money’s worth, the amount by which the value of the property exceeded the value of the consideration is deemed a gift. A necessary corollary of this provision is…
“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.…
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…
