If there was one part of the Tax Cuts and Jobs Act (“TCJA”) that estate planners were especially pleased to see, it was the increase in the basic exclusion amount from $5.49 million, in 2017, to $11.18 million for gifts made, and decedents dying, in 2018.[i] However, many estate planners failed to appreciate the
Split-Dollar Life Insurance & Succession Planning
The owners of a closely-held business confront several issues upon the death of any one of them:
- How will the decedent’s shares be valued?
- How will the decedent’s estate pay the resulting estate tax?
- To whom will the decedent’s shares be transferred?
- How will the acquiring party pay for such shares?
In most cases, the
Estate Planning & Sales to Grantor Trusts: Not Dead Yet
The Goals
The owners of interests in closely-held businesses have long sought out ways by which they can remove the future appreciation of such interests from their gross estates for estate tax purposes, but without incurring gifts taxes and income taxes.
One popular method to achieve these goals has been the sale of the closely-held
Are You Foreign to S Corporations?
Oops
During the course of my career, I have sometimes gone months, if not years, without encountering a particular tax issue. I am aware of the issue and I am familiar with the relevant authorities, but it was not a concern for the clients whom I was then representing. Then, all of a sudden, the
Sale to IDGTs: The Death Of The Grantor
At the beginning of every year, the IRS informs the public of those tax matters on which the IRS will not issue letter rulings. Typically, these are areas of the tax law that are under study at the IRS, and that the IRS hopes to address through the publication of a revenue ruling, a
SCIN Alive?! A Tale of Death, Taxes, Doubt, and Redemption.
Davidson was dead to begin with. Dead as a door-nail. His death did not come as a great surprise, at least to some, though few (other than the IRS) expected him to go as quickly as he did. And that was the root of the problem. But I don’t want to get ahead of myself.
The Disgruntled Shareholder & “Breaking” the S Election, Part I
During the course of the year, we encounter a number of shareholder disputes. Sometimes we represent a minority shareholder; sometimes we represent the corporation or the majority shareholders. 
Regardless of who the players are, the resolution of the dispute will involve some economic deal. The economic deal, in turn, will depend in no small part
Selling a Family Asset: It Makes Business Sense– Will the IRS Care?
Here We Go Again
It is a common theme of these posts that a transaction has to make sense from a business perspective, that it should not be undertaken primarily for tax purposes, and that the goal of tax planning should be to maximize the economic benefit of the transaction by reducing the resulting tax
S Corp. Trusts & the 3.8% Surtax on NII: Part IV
Planning for the Surtax
The best time to plan for any tax event is well before it occurs, and this also applies to the surtax. The trustee of a trust will almost always want the business income of the trust to be characterized as active income. The surtax may be addressed, at least partially, in
S Corp. Trusts & the 3.8% Surtax on NII: Part II
Material Participation by S Corp. Trusts
Since the enactment of the “material participation” test, as part of the passive activity loss (“PAL”) rules, in 1986, the IRS has issued very little guidance on how the test applies to trusts. Neither the Code nor the Regulations are helpful.
When the IRS issued proposed regulations for the