Legal Updates & Commentary for Tax & Estate Planning
The Passive Loss Rules
In general, if a taxpayer’s aggregate losses from passive activities exceed the taxpayer’s aggregate income from passive activities for the taxable year, the excess losses may not be deducted against other income for that taxable year. Such excess losses are suspended and are carried forward, to be treated as deductions from…
No, I don’t mean the yellow-brick road, or any train, or anything like that. I am referring, of course, to the Protecting Americans from Tax Hikes Act of 2015 (the “PATH” or the “Act”). The recently enacted legislation provides a number of tax benefits, a few of which will be of particular interest to…
It sounds pretty impressive, doesn’t it? What’s more impressive is that, this time, Congress did not wait until the very end of the year – or the beginning of the next year for that matter – to pass some important and long-awaited legislation. (the “Act”).
Most businesses and their advisers would have preferred to…
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…
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…
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…
Related Party Expenses
It is not unusual for one close corporation to pay the expenses incurred by a related corporation or business. There are many circumstances in which such a payment may occur, but they share one overriding theme: the related corporations view themselves – or, more properly, their owners view them – as a…
Last week, we considered NY’s income tax treatment of the gain realized by a non-resident of NY on his or her sale of stock in a corporation that owns NY real property. Although the strength of the NY real property market cannot be ignored, there are a number of other NY-based businesses in which…
In most cases, a financially troubled business will face some difficult choices, including which creditors to pay and which to defer. The Federal and State taxing authorities are often among these creditors. As we have seen on other occasions, a business’s decision to defer the payment of State taxes may have significant legal and, ultimately…
