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
planning ahead
Split-Dollar Life Insurance & Succession Planning
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
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…
“Bad Boy Guarantees” Redux
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Partnership Allocations
The allocation of a partnership’s items of income, gain, deduction and loss among its partners must have substantial economic effect if it is to be respected by the IRS. The determination of whether an allocation has substantial economic effect for tax purposes involves a two-part analysis: first, the allocation must have economic effect…
It’s Never Too Late? It Can Be.
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
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…
“Bad Boy, Bad Boy, What Ya Gonna Do?” Claim The Deduction.
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Partnership Allocations
A few weeks back we discussed the allocation of a partnership’s income and losses among its partners. Specifically, we considered the requirement that an allocation to a partner must have substantial economic effect if it is to be respected by the IRS. The determination of whether an allocation has substantial economic effect for…
Corporate-Owned Real Estate: Can It Be Split Off Tax-Free? Part II.
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Be sure to start with Part I, here!
Real Estate as an Active Business
The active conduct of a trade or business does not include the holding for investment purposes of land, or other property, or the ownership and operation (including the leasing) of real property used in a trade or business, unless the…
Self-Charged Rental & The Passive Loss Rules
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
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…
A Story of Law Firm Compensation, Part II
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Don’t miss Part I, here!
“I appreciate your eagerness,” said the adviser. “You can just imagine how I feel every morning when I read through the latest tax news. It takes a Herculean effort to contain myself.”
“OMG,” he’s crazy, “what was my dad thinking when he retained this guy?!”
“I see the look…
Partnership Tax Allocations: Follow the Economics
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Flexible Economic Arrangements
We represent a number of entrepreneurs. The form of business entity that they most often choose to operate is an LLC that is treated as a partnership for income tax purposes. They recognize that the LLC is not a taxable entity, that there are no limitations upon who may invest in an…
Disposing of a Small Corporate Business? Check the PATH First.
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
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…