Legal Updates & Commentary for Tax & Estate Planning
In the sale of a business, it is the goal of every business owner and his tax adviser to minimize the amount of gain recognized and, to the extent gain is recognized, to maximize the amount that is treated as capital gain.
The gain realized on…
“Tax free” – two words that often bring great delight when they are spoken by a tax adviser to the owner of a business, whether he is considering the disposition of a single asset, or of substantially all of the assets, of his business. (It’s the feeling I have when the local McDonald’s offers two-for-one…
Picking up on yesterday’s discussion, how can a PEF reconcile its preference to acquire a depreciable or amortizable basis for its target’s assets while, at the same time, affording the target’s owners the opportunity to roll-over a portion of their equity in the target into the PEF HC on a tax-favored basis? The answer is hardly simple, and it will depend upon a number factors.
Continue Reading Rolling Over Target Equity Into A PE Fund: Part II
For many business owners, the final step of a successful career may be the sale of their business. At that point, the investment into which the owners have dedicated so much time, effort and money is liquidated, leaving them with what is hopefully a significant pool of funds with which to enjoy their retirement, diversify…
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…
Don’t miss Part I, here!
“I appreciate your eagerness,” said the adviser. “You can just imagine how I feel every morning when I read through the latest tax news. It takes a Herculean effort to contain myself.”
“OMG,” he’s crazy, “what was my dad thinking when he retained this guy?!”
“I see the look…
The employee-owner of a corporate business will sometimes ask his or her tax adviser, “How much can I pay myself out of my corporation?”
The astute tax adviser may respond, “First of all, you are not paying yourself. The corporation is a separate entity from you, its shareholder. That being said, the corporation can pay…
It Was the Worst of Times, Except . . .
It happens in most closely-held businesses: so long as the business is profitable and cash keeps flowing into the hands of the owners, everyone is happy. When the spigot slows, or is just plain turned off, however, the investor-owners (as distinguished from the management-owners) will…
There is nothing like an old proverb to remind you of the obvious. Unfortunately, too many taxpayers need to be reminded all too often. It’s one thing when the reminder comes from the taxpayer’s own advisers – at that point, the taxpayer may still have an opportunity to “correct” his or her actions. It is…
In General
In earlier posts, we described how a closely-held business may use a nonqualified deferred compensation (“NQDC”) plan to retain the services of, and to incentivize, a key executive employee. We also discussed the various requirements that such a plan must satisfy in order to successfully defer the inclusion in the employee’s income…
