In General

It is a basic principle of federal tax law that a taxpayer cannot, for purposes of determining the taxpayer’s taxable income, claim a loss with respect to an investment in excess of the taxpayer’s unrecovered economic cost for such investment. If the taxpayer invested $X to acquire a non-depreciable asset – for example,

A Continuing Investment

In the last two posts, we saw how a Taxpayer who transfers Property A to a partnership (“Partnership”) in exchange for an equity interest therein will not be required to recognize the gain realized on the transfer. This gain will not be included in Taxpayer’s gross income because Taxpayer is viewed under

“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

We have heard a lot about large, publicly-traded U.S. corporations that have parked trillions of dollars overseas to avoid the payment of U.S. income tax. We have heard how the tax system must be seriously broken to have so incentivized so many of these corporations to “relocate” overseas.
Continue Reading Reporting A Closely Held U.S. Corporation’s Overseas Activities

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

Having worked with many families in the administration of their loved ones’ estates, I can report anecdotally that over the last decade, tax-deferred retirement assets have constituted an ever-increasing share of individual wealth, even for those estates that fall below the estate tax exemption amount. Such tax-deferred assets come in many different forms; some of

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