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
In S Corps We Trust
Earlier this year, the IRS issued Rev. Proc. 2013-30 to provide relief to corporations that have ceased to qualify as S corporations where the terminating event was not reasonably within the control of the corporation. In particular, the Rev. Proc. addresses late QSST and ESBT elections.
The issuance of the Rev. Proc., which consolidates various
Make Sure to Have Some SCIN in the Game
Historically, the gift and estate tax laws have limited the ability of wealthy individuals to transfer their interests in family businesses to their children without suffering potentially severe tax consequences. However, many wealthy taxpayers are interested in shifting the appreciation in their business out of their estate and into the hands of their children.
Transfers
Splitting Up the Family Corporation
Many of us encounter family-owned corporations in which the founder’s children are engaged in the business to varying degrees. They may even own shares in the corporation. These situations present difficult estate and succession planning considerations for the family and the business.
Scenarios
It may be that two siblings actively participate in the business. They
2014 Inflation Adjustments
The IRS recently announced its annual inflation adjustments for 2014, which will cover more than 40 tax provisions. Notably, the following adjustments will be made for 2014: 
- The maximum tax rate of 39.6% will affect singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000,
Equity Compensation in a Partnership
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.
The 2013 Rate Increases and Deferred Compensation
For many executives, the 2013 tax year began with an increase in the marginal federal income tax rate applicable to their compensation, from 35% to 39.6%. It also saw the expiration of the temporary payroll reduction for the employee’s share of OASDI, which consequently increased from 4.2% to 6.2%, plus an additional 0.9% increase
Sale of Business Meets Investment Income Surtax
The owners of a business must consider many tax issues in connection with its sale. These include the structure of the transaction as a sale of assets or stock, the amount of gain arising from each structure, the character of the gain as ordinary or capital, and the resulting tax liability. From the foregoing, the