Louis Vlahos on Closely Held Businesses

Private Foundations, Closely Held Businesses, And Distribution Requirements

“Show Me the Money”- Much has been written in recent months about how well the investment portfolios of private foundations have performed over the last several years. For example, a study conducted by the Council on...more

10/12/2022 / Bipartisan Budget Act , Business Income , C-Corporation , Charitable Organizations , Closely Held Businesses , Distribution Rules , Donor-Advised Funds (DAFs) , Internal Revenue Code (IRC) , Investment Portfolios , IRS , Private Foundations , Required Minimum Distributions , S-Corporation , Tax Deductions , Tax Liability

Business Expenses Paid by Shareholder, But Whose Deduction Is It?

Constructive Transfers- It is axiomatic that the tax treatment of interactions between a closely held business and its owners will generally be subject to heightened scrutiny by the IRS, and that the labels attached to such...more

9/27/2022 / Business Expenses , Business Taxes , C-Corporation , Closely Held Businesses , Deductions , Investment , IRS , Parent Corporation , Personal Exemptions , S-Corporation , Shareholders , Tax Court , Tax Deductions

Dividing the Multi-Family Corporation

Sibling Rivalry- You have probably encountered family-owned corporations in which the founder’s offspring are involved in the business to varying degrees. They may even own some equity, typically having received such equity...more

9/22/2022 / Closely Held Businesses , Distribution Rules , Estate Planning , Fair Market Value , Family Businesses , IRS , Popular , Reorganizations , Shareholders , Succession Planning , Tax-Free Spin-Offs

New York to Taxpayer: “Forget What the Feds Said, You’re a ‘Responsible Person"

Where is the Economy Heading? According to the data released Friday by the Department of Labor, the U.S. economy added approximately 528,000 jobs in July, reducing the unemployment rate to 3.5 percent. Although this...more

8/9/2022 / Administrative Law Judge (ALJ) , Business Taxes , Closely Held Businesses , Department of Labor (DOL) , Federal Reserve , Foreign Markets , Income Taxes , IRS , New York , Price Inflation , Tax Appeals , Tax Liability , Tax Tribunal , Unemployment , Wages , Withholding Tax

Shareholder Beware: Personal Liability for N.Y. Sales Tax

Limited Liability? Many individual taxpayers who invest in a closely held business, including one organized as a corporation, fail to appreciate there are circumstances in which they may be held personally liable by a...more

5/10/2022 / Audits , Closely Held Businesses , Corporate Taxes , Duty to Act , Financial Transaction Tax , Income Taxes , Information Document Requests , New York , Personal Liability , Sales Tax , Shareholders , Tax Appeals

Unreasonable Compensation As Constructive Dividend, Redux

An often-explored theme of this blog is the frequency with which similarly situated owners of similarly situated closely held business, facing a similar set of economic circumstances, and presented with a similar set of...more

5/3/2022 / Appellate Courts , B Corporation , C-Corporation , Closely Held Businesses , Compensation , Dividends , Entrepreneurs , Management Fees , Reasonable Compensation , Shareholders , Stocks , Tax Court , Tax Deductions , Written Agreements

Current Partnership Distributions: When Do You Figure Your Basis?

Withdrawing Value- In general, the owners of a closely held business have several options by which they may withdraw money from the business without selling their interest in the business....more

4/26/2022 / Capital Assets , Closely Held Businesses , Compensation , Debtor-Creditor , Equity , Fund Distribution , IRS , Liquidation , Partnership Distributions , Partnership Interests , Partnerships , Passthru Payments , Taxation

Constructive Dividends and The Closely Held C Corporation

Withdrawing Value- Any tax adviser who has represented closely held businesses and their owners long enough realizes there are certain recurring themes that transcend the otherwise unique characteristics of the industry of...more

3/21/2022 / C-Corporation , Closely Held Businesses , Compensation , Corporate Taxes , Credit Cards , Dividends , IRS , Management Fees , Meal and Entertainment Expenditures , Personal Use , Shareholder Distributions , Shareholders , Tax Court , Tax Planning

Reasonable Compensation Meets The Principal Shareholder of a C Corp

Double Tax- The shareholders of C corporations have long sought legitimate operational and transactional structures by which they may reduce the double tax hit that is realized when such a corporation distributes its...more

Me, Myself, and I: Tax Liabilities and Dealing with One’s Own Business

“It’s My Business”- The owner of a closely held business will often find it difficult to distinguish the business from their own person. That is certainly true for a sole proprietorship. In many cases, unfortunately, the...more

2/17/2022 / Alter Ego , Client Assets , Closely Held Businesses , Compensation , Creditors , Fraudulent Transfers , IRS , Limited Liability Company (LLC) , Purchase Agreement , Tax Assessment , Tax Liability , Trusts

Deferring the Tax Hit on a Grant Equity to an Employee – Are You Prepared to Enforce the Forfeiture Provision?

“Would I ever leave this company? Look, I’m all about loyalty. In fact, I feel like part of what I’m being paid for here is my loyalty. But if there were somewhere else that valued loyalty more highly, I’m going wherever they...more

2/11/2022 / Closely Held Businesses , Compensation , Corporate Officers , Directors , Employee Stock Purchase Plans , Equity , ESOP , Fair Market Value , Family Businesses , Forfeiture , IRS , Limited Liability Company (LLC) , Partnerships , S-Corporation , Tax Court , Tax Shelters , Trustees , Vested Benefits

Leaving New York – But What About One’s New York Business?

Goodbye New York- Late last year, the U.S. Census Bureau released data showing population shifts across the country during 2021. According to this information, New York lost 1.8 percent of its population... ...more

1/18/2022 / Apportionment , C-Corporation , Census Bureau , Closely Held Businesses , Corporate Taxes , Domicile , Exit Tax , Income Taxes , Middle Market , New York , Pass-Through Entities , Residence Status , Small Business , State of the State , Tax Advice , Tax Increases , Tax Relief , Taxable Income

Gifting Business Interests Before Selling the Business? Think Valuation

Counting the Days?- We are 302 days away from the national mid-term elections, to be held November 8, 2022, yet the first full week of the new year has already highlighted some of the economic issues with which the...more

New York’s Pass-Through Entity Tax, F Reorgs, and the Sale of An Electing S Corp

Timing- I had planned to post this piece during the third week of December, a day or so after the exchange between Senator Manchin and the White House sealed the fate of the Build Back Better plan, at least in its current...more

1/4/2022 / Business Assets , Closely Held Businesses , IRS , Limited Liability Company (LLC) , New York , Partnerships , Pass-Through Entities , Private Equity , QSub , Reorganizations , Revenue Procedures , S-Corporation , SALT , Shareholders , Tax Increases , Tax Liability , Transfer Taxes

The Tax-Deferred Rollover – Some Considerations

“I have wondered at times what the Ten Commandments would have looked like if Moses had run them through the U.S. Congress.” – Pres. Ronald Regan- That line probably describes the exasperation with which many Americans...more

12/14/2021 / Acquisitions , Business Ownership , Capital Gains , Closely Held Businesses , Fair Market Value , Federal Budget , Income Taxes , Partnerships , Private Equity , Stocks , Target Company , Tax Code , Tax Deferral , Tax Increases , Tax-Free Exchanges

Selling Your S Corporation’s Business? What If It’s Not an S Corporation?

Haste Makes Waste? How many of you are suffering from Build Back Better Fatigue? Seriously, it’s a thing. Sure, the House passed its version of the President’s tax and spending bill on November 19, and the Senate...more

12/9/2021 / Beneficiaries , Business Ownership , C-Corporation , Capital Gains Tax , Closely Held Businesses , Good Faith , IRS , Reorganizations , Restructuring , S-Corporation , Sale of Assets , Shareholders , Target Company , Tax Increases , Trustees , Trusts , Ways and Means Committee

Gift Transfers: Not on the Congressional Agenda, But Still in the Crosshairs of the IRS

Same old in D.C.- On Monday, November 15, the President will sign into law the approximately $1 trillion Infrastructure Investment and Jobs Act that was finally passed by Congress when the House approved the Senate’s...more

11/15/2021 / Beneficiaries , Business Assets , Closely Held Businesses , Dynasty Trust , Fair Market Value , Gift Tax , Infrastructure , IRS , Joe Biden , Limited Liability Company (LLC) , Net Investment Income , Partnerships , Revocable Trusts , Surcharges , Tax Advice , Tax Returns , Taxable Exchanges , Taxable Income , Transfer Taxes , Valuation

Gifts, Sales and Effective Dates: The Race Against the Clock the Taxpayer Cannot See

It was quite a week, wasn’t it?- Manchin- Senator Manchin continued to attract a lot of attention. To the dismay of his fellow Democrats, the West Virginian – who also chairs the Senate Energy and Natural Resources...more

Tax Hikes, Senator Manchin, and Effective Dates – OH MY!

What was your month like? If you’re a transactional professional – a class in which I include those who advise clients on the purchase and sale of businesses and investment assets, as well as those who assist clients in...more

10/5/2021 / Budget Reconciliation , Business Ownership , Capital Gains , Closely Held Businesses , Federal Taxes , Joe Biden , Popular , Tax Code , Tax Cuts and Jobs Act , Tax Increases , Ways and Means Committee

Tax Increases Are In Sight

Summertime in Washington- On August 11, the Senate passed the $3.5 trillion budget resolution for the 2021-2022 fiscal year – S. Con. Res. 14, as amended – by a vote of 50 to 49, strictly along party lines, including...more

9/7/2021 / Budget Reconciliation , Closely Held Businesses , Congressional Budget Resolution , Earn-Outs , Escrow Accounts , Estate Tax , General-Business , Gift Tax , Legislative Agendas , Popular , SALT , Selling a Business , Tax Increases , Tax Rates , Transfer of Assets

Louis Vlahos

Rivkin Radler LLP

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