Legal Updates & Commentary for Tax & Estate Planning
It Was the Worst of Times, Except . . .
It happens in most closely-held businesses: so long as the business is profitable and cash keeps flowing into the hands of the owners, everyone is happy. When the spigot slows, or is just plain turned off, however, the investor-owners (as distinguished from the management-owners) will…
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…
A Plethora of Partnerships
According to a recently released IRS analysis of tax return data, the number of partnerships and partners in the U.S. continues to increase, as do the total receipts and the value of total assets for all partnerships. LLCs classified as partnerships account for the majority of this growth.
These figures…
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…
It is not unusual for a closely-held business or for its owners to issue or transfer equity in the business to a third party in order to raise necessary funding for the business or to secure the services of someone with a certain expertise. In most cases, where the equity transfer is made by 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…
“One Day, Lad, All This Will Be Yours.”
Many a closely-held business was created before its founder became a parent or when the founder’s children were still very young. As the business grew, and as the founder’s children matured, the founder may have entertained the notion of eventually having her children take over the business.…
Make sure you check out Part I before reading below…
The Bigger Picture
In addition to the SCIN-specific issues, the complaint touches on a number of themes of which every estate-planning adviser – and every client – should be aware.
The Facts Matter
An adviser should assume that the IRS will scrutinize the estate plan…
What would you do?
The decedent was an extremely wealthy man, with a net worth in excess of $3 billion. You are the executor of his estate.
Prior to his death in 2009, he retained one of the top tax firms in the country to review his existing estate plan.
Under his existing plan, which…
