Sometimes, the U.S. Tax Court will rule on a matter the outcome of which would seem – at least to an outsider, or on some visceral level – to have been a foregone conclusion. Indeed, one is often left wondering how such a matter was allowed to progress through an IRS audit, IRS Appeals, the
Section 409A, Part IV: Equity Compensation
Equity compensation is attractive to employees and employers alike. Because the opportunity to participate in the growth of a company provides potentially unlimited compensation to employees, its incentive value is quite powerful to employers. In this last post in this series on Section 409A, we will sort through the types of equity compensation that are
Section 409A, Part III: Alternative Compensation Arrangements
Our last post described the portions of an executive employment agreement that may be impacted by Section 409A. However, Section 409A may also impact the structure of other, less traditional compensation paid to key employees. In the context of a closely-held business, two commonly-encountered alternative compensation arrangements used outside of the context of an individual
Section 409A, Part II: The Employment Agreement Obstacle Course
Closely-held businesses often rely heavily on a small group of key employees to help their businesses succeed. Given the value of these key employees to the business, it is not uncommon for the business to offer them certain types of additional executive compensation, in addition to standard base salary and participation in typical employee welfare
Section 409A, Part I: What Is It?
Ask most closely-held business owners what words come to mind when they hear the names “Enron” and “Worldcom” and many would say things like “bankruptcy,” “failure,” “scandal” and “greed.” Ask those same business owners what impact those two names had on the ways they are able compensate their key employees and most would likely say
Holding Property For Investment? Make Sure To Act Like It.
In several previous posts, we have emphasized the importance of educating oneself about the tax consequences of any given business transaction well before that transaction comes to life. In many situations, such forethought gives a taxpayer the opportunity to weigh the costs and benefits of different courses of action and, as a result, to
Deal Economics: The NY Real Estate Transfer Tax, Part II
In contrast to the sales tax, which does not apply to a sale of real property or to a sale of equity in a company, the real estate transfer tax does apply to the former and may apply to the latter. In the context of a deal, there may also be other situations in which
Deal Economics: The NY Real Estate Transfer Tax, Part I
In a prior post, we discussed the impact of the New York sales tax upon the economics and structure of a so-called “M&A” transaction. In this post, we will consider another transfer tax that is often encountered in an M&A deal: New York’s real estate transfer tax. 
Deal Economics
Why are taxes so important
Deductions Under Scrutiny
With this post, we continue to examine transactions between the closely-held business and its owners. As we saw last week, special scrutiny is given in situations where a business is controlled by the individual with whom it engages in a transaction because there is a lack of arm’s-length bargaining. That is certainly the case
Loan? Oh That!
Over nearly three decades, I have reviewed the income tax returns of many closely held corporations and partnerships. Quite often, on Schedule L (the Balance Sheet), I will see an entry for “loan from” shareholder or partner, as the case may be. I sometimes pause before asking the next series of questions: did the board