Legal Updates & Commentary for Tax & Estate Planning
Installment Reporting: Sale of Corporate Stock v. Sale of Partnership Interest
Most advisers understand that if a taxpayer sells his or her shares of stock in a corporation in exchange for a promissory note, the taxpayer generally can defer recognition of the gain realized on the sale until principal payments are received on the note…
A partnership is not subject to Federal income tax. Instead, an item of income or loss of the partnership retains its character and flows through to the partners, who must include such item on their tax returns. Generally, some partners receive partnership interests in exchange for contributions of cash and/or property, while others receive partnership…
In the choice of entity debate, the ability to divide the corporation’s business assets and activities into two or more separate corporations, owned by different shareholders, without incurring taxable gain, is often said to be one of the more significant advantages enjoyed by the corporate form of business. However, though the partnership provisions of the…
It is not unusual for a parent to have successfully started and grown a business, only to find that his children either have no interest in continuing the business or are incapable of doing so. Prior to that moment of realization, however, Parent may have transferred equity in the business to his children, either as…
In the context of a family business, we are sometimes presented with situations in which the business wishes to sell property to, or acquire property from, a family member or an affiliated business in which he is involved. The transferors are often surprised by the tax consequences of these transactions.
Assume that Taxpayer owns land…
The withdrawal of a partner from a partnership is one of the most common business transactions. In some cases, the partner leaves amicably; in other cases, the departure may occur after many disagreements and, perhaps, litigation. Regardless of the cause of the partner’s withdrawal, it is often the case that neither the partner nor the…
The grant of an equity interest by a partnership to one of its key employees should be approached with great caution because it may result in unintended tax consequences, both for the partnership and the partner.1
Many corporate employers use equity-based compensation in the form of stock or stock options to motivate their employees. …
