A parent will sometimes transfer money to a child to enable the child to make an investment that the child could not otherwise make on their own. For example, the child may have identified an attractive business opportunity...more
4/1/2025
/ Borrowers ,
Estate Tax ,
Fair Market Value ,
Gift Tax ,
Interest Rates ,
Internal Revenue Code (IRC) ,
Investment ,
IRS ,
Loans ,
Tax Court ,
Tax Liability ,
Tax Planning ,
Trusts
There is no denying that many parts of the Code are complex and, in some cases, too obscure for many “laypersons” to comprehend. Over time, this reality spawned the need for advisers who are both knowledgeable and experienced...more
8/12/2024
/ Business Expenses ,
Capital Gains ,
Fair Market Value ,
Foreign Persons ,
Internal Revenue Code (IRC) ,
IRS ,
Limited Liability Company (LLC) ,
Non-Resident Aliens ,
Partnership Interests ,
Tax Cuts and Jobs Act ,
Tax Deductions ,
Taxable Income
You may have heard or even read about the U.S. Supreme Court’s recent decision regarding the date of death value of a deceased shareholder’s shares in a closely held corporation that owned a life insurance policy on the...more
7/1/2024
/ Business Succession ,
Buy-Sell Agreements ,
Buyouts ,
Certiorari ,
Closely Held Businesses ,
Connelly v United States ,
Estate Tax ,
Fair Market Value ,
IRS ,
Liability ,
Life Insurance ,
Liquidity ,
Redemption Agreement ,
Right of Redemption ,
SCOTUS ,
Shareholders ,
Tax Audits
Earlier this week the White House released its Fiscal Year 2025 Budget. Of course, the federal government has not yet adopted a budget for the Fiscal Year 2024 even as we approach that year’s halfway mark. But I digress. The...more
3/18/2024
/ Capital Gains ,
Estate Tax ,
Exclusions ,
Fair Market Value ,
Federal Budget ,
Fiscal Year ,
Gift Tax ,
Grantor Retained Annuity Trusts (GRATs) ,
Grantor Trusts ,
Grantors ,
GST ,
IRS ,
Reporting Requirements ,
Revocable Trusts ,
Tax Credits ,
Tax Deferral ,
Tax Increases ,
Tax Revenues ,
Transfer Taxes ,
Trusts ,
U.S. Treasury ,
Valuation
How many times have you wished that you could undo something from your past, perhaps a string of incoherent statements made at a client dinner while slightly under the influence, or an expletive-filled email composed and sent...more
3/7/2024
/ Abrogation ,
Capital Gains ,
Cash Transactions ,
Fair Market Value ,
IRS ,
Property Transaction Taxes ,
Property Valuation ,
Reacquisitions ,
Real Estate Transactions ,
Related Parties ,
Repossess ,
Rescission ,
Selling a Business ,
Tax Liability
It’s not enough for the founder of a closely held business to have successfully established the business. The business has to grow, not only to increase profits, but also to make it more competitive and to diversify its...more
11/6/2023
/ Bypass Trusts ,
Closely Held Businesses ,
Disclaimers ,
Estate Planning ,
Estate Tax ,
Executors ,
Fair Market Value ,
Family Businesses ,
Gift Tax ,
Irrevocable Trusts ,
IRS ,
Marital Trusts ,
Personal Liability ,
QTIP Trusts ,
Surviving Spouse ,
Tax Liability ,
Taxation ,
Transfer Taxes ,
Trustees ,
Trusts
Do you feel as challenged as I do when someone asks you to explain the term “Bidenomics”? I know that it is predicated upon the imposition of higher taxes on businesses and their owners, which have not yet materialized....more
8/17/2023
/ Business Ownership ,
Buyers ,
Cancellation of Debt (COD) ,
Capital Gains ,
China ,
Debt ,
Fair Market Value ,
Federal Budget ,
Federal Taxes ,
Income Taxes ,
Insolvency ,
IRS ,
Limited Liability Company (LLC) ,
Recessions ,
S-Corporation ,
Startups ,
Tax Court ,
Third-Party
Faulty Framework?
The question posed above is not intended to be rhetorical. Rather, it is one that the owners of a closely held business should consider thoroughly before transferring or committing any business assets to...more
8/4/2023
/ Charitable Donations ,
Charitable Organizations ,
Charitable Trusts ,
Closely Held Businesses ,
Fair Market Value ,
Family Businesses ,
For-Profit Corporations ,
IRS ,
Nonprofits ,
Public Charities ,
S-Corporation ,
Tax Court ,
Tax Deductions
What Was Intended?
Transactions between commonly controlled, closely held businesses are often conducted in an informal manner. This is unfortunate because, in the absence of documentation, it is sometimes difficult to...more
7/20/2023
/ Bad Debt ,
Capital Assets ,
Capital Contributions ,
Closely Held Businesses ,
Creditors ,
Debt ,
Debtor-Creditor ,
Deductions ,
Equitable Contribution ,
Equity ,
Fair Market Value ,
Fund Transfers ,
Investment ,
IRS ,
Loans ,
Ownership Interest ,
Real Estate Development ,
S-Corporation ,
Secured Debt ,
Tax Court ,
Tax Liability ,
Tax Returns
Estate Tax – It’s a Killer-
One of the reasons often given for eliminating the estate tax is the substantial economic burden it places upon the estate of a deceased business owner and upon the business itself. Specifically,...more
6/16/2023
/ Acceleration ,
Adjusted Gross Income ,
Business Assets ,
Business Ownership ,
Closely Held Businesses ,
Deceased ,
Decedent Protection ,
Estate Tax ,
Fair Market Value ,
Gift Tax ,
Installment Agreements ,
Irrevocable Life Insurance Trusts ,
IRS ,
Life Insurance ,
Redemption Agreement ,
Stock Ownership ,
Stock Purchase Agreement ,
Tax Liability ,
Testamentary Transfers
At war with Russia in eastern Europe, a nascent competing world order, mass shootings and bank failures at home, questionable audit practices by the Big 4 . . . everywhere, debt ceilings and the risk of default, inflation,...more
5/12/2023
/ Capital Contributions ,
Capital Gains ,
Capital Investments ,
Fair Market Value ,
Future Profits ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Investors ,
IRS ,
Limited Liability Company (LLC) ,
Liquidation ,
Partnership Interests ,
Partnerships ,
Profits Interests ,
Safe Harbors ,
Tax Court ,
Term Sheets
On March 20, 2023, Senators Warren, Sanders, Van Hollen, and Whitehouse addressed a letter to Treasury Secretary Yellen in which they urged Yellen “to use [her] existing authority to limit the ultra-wealthy’s abuse of trusts...more
4/11/2023
/ AFR ,
Estate Tax ,
Fair Market Value ,
Gift Tax ,
Grantor Trusts ,
Heirs ,
Irrevocable Trusts ,
IRS ,
Tax Avoidance ,
Tax-Free Transfers ,
Trusts ,
U.S. Treasury
State of the “Union”
Did you watch the President’s state of the union address the other night? Was it as you expected? Were you hoping for something more? Were you disappointed? Did you find it informative? Maybe...more
2/13/2023
/ Capital Assets ,
Debt ,
Dischargeable Debts ,
Fair Market Value ,
FIRPTA ,
Foreign Ownership ,
Foreign Taxpayers ,
IRS ,
Joe Biden ,
Lenders ,
Purchasers ,
Short Sales ,
State of the Union ,
Tax Liability
Debacle-
Understanding the etymology of a word often enables us to better understand or appreciate its use in contemporary speech. For example, the word “crypto” is derived from the Greek word “krypto,” which describes...more
1/20/2023
/ Bitcoin ,
Capital Gains ,
Cash Value ,
Cryptocurrency ,
Debentures ,
Digital Assets ,
Fair Market Value ,
Federal Taxes ,
Investment ,
IRS ,
OCC ,
Tax Deductions ,
Tax Losses ,
Virtual Currency
To avoid the manipulation of tax consequences to which transactions between certain related taxpayers may be susceptible, the IRS and the Courts generally require that such transactions be closely scrutinized to ensure that...more
12/2/2022
/ Arms Length Transactions ,
Capital Distributions ,
Capital Gains ,
Closely Held Businesses ,
Fair Market Value ,
Internal Revenue Code (IRC) ,
IRS ,
Like Kind Exchanges ,
Limited Liability Company (LLC) ,
Partnerships ,
Tax Avoidance
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
Tax Alchemy?
How many of you remember Section 138509 of the Ways and Means Committee’s markup last September of what would have been the Build Back Better Act? (A moment of silence, please.) Allow me to jog your memory....more
7/26/2022
/ Capital Gains ,
Domestic Partnership ,
Fair Market Value ,
IRS ,
Like Kind Exchanges ,
Partnerships ,
Pass-Through Entities ,
Property Owners ,
S-Corporation ,
Shareholder Distributions ,
Shareholders ,
Stocks ,
Tax Deferral ,
Taxable Exchanges ,
Ways and Means Committee ,
Wealth Tax
Don’t Do It-
There are certain generally accepted “dos and don’ts” of which almost every investor is certainly aware. For example, do not put all your eggs in one basket; if an investment seems too good to be true, stay...more
5/31/2022
/ Capital Losses ,
Corporate Taxes ,
Debt ,
Estate Planning ,
Fair Market Value ,
Installment Agreements ,
Intangible Property ,
Investment ,
Investors ,
Limited Liability Company (LLC) ,
Liquidation ,
Partnerships ,
Related Parties ,
S-Corporation ,
Sale of Assets ,
Shareholders ,
Stocks ,
Tangible Property ,
Tax Liability
Sale of the Business-
Imagine Client has just received an attractive, all cash offer for the sale of their business; there is no financing contingency. The buyer has proposed a cash-free and debt-free deal....more
5/17/2022
/ Balloon Payments ,
Borrowers ,
Cash Transactions ,
Debt ,
Fair Market Value ,
Income Taxes ,
Installment Agreements ,
Lenders ,
Promissory Notes ,
Secured Debt ,
Selling a Business ,
Tax Deferral ,
Tax Liability ,
Tax Returns ,
Trusts
“Déjà vu All Over Again”-
The White House last week released the President’s Budget for the Fiscal Year 2023. The Budget is ambitious, but its “investments,” we are told, “are more than paid for with tax reforms focused on...more
4/8/2022
/ Capital Gains ,
Capital Gains Tax ,
Estate Tax ,
Fair Market Value ,
Family Businesses ,
Federal Budget ,
Gift Tax ,
Grantor Retained Annuity Trusts (GRATs) ,
Grantor Trusts ,
Income Taxes ,
Joe Biden ,
Rule Against Perpetuities ,
Taxable Income ,
Transfer Taxes ,
Trusts ,
Wealth Tax
“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
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
1/12/2022
/ Appraisal ,
Business Ownership ,
Business Valuations ,
Closely Held Businesses ,
Estate Planning ,
Estate Tax ,
Fair Market Value ,
Federal Budget ,
Gift Tax ,
Grantor Retained Annuity Trusts (GRATs) ,
Grantor Trusts ,
Investment Banks ,
IRS ,
Letters of Intent ,
Mark-To-Market ,
Medicare ,
Net Investment Income ,
Qualified Small Business Stock ,
Stocks ,
Surtax ,
Target Company ,
Tax Increases ,
Wealth Tax
“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
Not Selling Your Business This Year?
Beginning shortly before the House Ways and Means Committee released its version of the President’s Build Back Better plan, several posts on this blog have explored the uptick in M&A...more
11/29/2021
/ Arms Length Transactions ,
Business Ownership ,
Buy-Sell Agreements ,
Corporate Taxes ,
Equity ,
Estate Tax ,
Fair Market Value ,
Family Businesses ,
Income Taxes ,
IRS ,
Life Insurance ,
Liquidity ,
Mergers ,
Partnerships ,
Shareholders ,
Stock Purchase Agreement ,
Tax Increases ,
Transfer of Assets ,
Ways and Means Committee
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