Every now and then, some well-meaning colleague will ask how I spend my free time. I usually pause before responding – to gather my thoughts – which prompts them to restate their question with what they believe is greater...more
1/13/2023
/ Business Income ,
Business Profits ,
Income Taxes ,
Investment ,
IRS ,
Loans ,
Profits ,
Tax Court ,
Tax Deductions ,
Tax Losses ,
Tax Planning ,
Taxable Income
It wouldn’t be far-fetched to say that, as a species, we humans have a propensity – rooted in our instinctive tendency for self-preservation – toward denying anything we believe may cause us harm. It should come as no...more
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
When is a loan not a loan? When it’s something else – for example, equity.
This is one of those pesky facts and circumstances issues that plague courts, taxpayers, and tax advisers to no end.
Debt- On one end of the...more
9/9/2022
/ Borrowers ,
Debt ,
Equity ,
Fixed-Rate Loans ,
Interest Rates ,
IRS ,
Lenders ,
Limited Liability Company (LLC) ,
Loan Documentation ,
Loans ,
Partnerships ,
Preferred Shares ,
Tax Court ,
Tax Returns ,
Value Appreciation
The Housing Market-
During the first quarter of 2022, the housing market accounted for 16.7 percent of gross domestic product (“GDP”). This figure represents a return to historic norms following the substantial reduction...more
6/15/2022
/ Affordable Housing ,
Capital Gains ,
GDP ,
Great Recession ,
Housing Market ,
Internal Revenue Code (IRC) ,
Inventory ,
Limited Liability Company (LLC) ,
Mortgages ,
Real Estate Brokers ,
Real Estate Development ,
Real Estate Investments ,
Real Estate Market ,
Tax Court ,
Tax Returns
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
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
Assumed Liabilities-
If a taxpayer were to sell the assets that comprise the taxpayer’s business, they would realize gain if the amount realized by the taxpayer from the sale is more than the taxpayer’s adjusted basis for...more
3/4/2022
/ Acquisitions ,
Amended Tax Returns ,
Deferred Compensation ,
Investment Property ,
IRS ,
Limited Partnerships ,
Sale of Assets ,
Tax Code ,
Tax Court ,
Tax Deductions ,
Tax Liability
“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
Tax the Rich?
The President’s plan for a tax regime that would ensure the rich pay their “fair share” of the cost of implementing his programs has come one step closer to being realized . . . maybe . . . well, sort of ....more
11/23/2021
/ Adjusted Gross Income ,
C-Corporation ,
Capital Gains ,
Capital Gains Tax ,
Corporate Taxes ,
Estate Tax ,
Gift Tax ,
Grantor Retained Annuity Trusts (GRATs) ,
Income Taxes ,
Infrastructure ,
Inter Vivos Gifts ,
IRS ,
Mark-To-Market ,
Net Investment Income ,
Social Security Taxes ,
Tax Code ,
Tax Court ,
Tax Liability ,
Tax Returns ,
Transfer Taxes ,
Valuation ,
Wealth Tax
Capital Loss-
If the amount realized by a taxpayer upon the sale of a partnership interest to a third party is insufficient to restore to the taxpayer their adjusted basis for the interest – i.e., their unrecovered...more
7/26/2021
/ Abandonment ,
Bankruptcy Trustees ,
Capital Assets ,
Capital Losses ,
Financial Reporting ,
Investors ,
IRS ,
Limited Liability Company (LLC) ,
Liquidation ,
Partnerships ,
Tax Court ,
Tax Returns
Movement Toward Tax Increases-
You may have read last week that Democrats on the Senate Budget Committee announced they had reached a deal on a budget resolution that will enable them to bypass Senate Republicans on the...more
7/19/2021
/ 1099s ,
Budget Reconciliation ,
Business Expenses ,
Corporate Officers ,
Employment Tax ,
Federal Taxes ,
FICA Taxes ,
Form 941 ,
FUTA ,
Income Taxes ,
IRS ,
Joe Biden ,
Management Fees ,
Reasonable Compensation ,
S-Corporation ,
Shareholders ,
Spouses ,
Tax Court ,
Withholding Tax
Head-Scratchers-
The Code is chock-full of provisions that will challenge the intellectual capacity, not to mention the patience, of most tax professionals. The complexity of these rules does not arise out of some sadistic...more
I Read the News Today-
Much of today’s news is dominated by the future of the Administration’s broadly defined infrastructure plan. Discussions among “those in the know” inevitably turn into debates over the wisdom of...more
6/21/2021
/ Biden Administration ,
Closely Held Businesses ,
Infrastructure ,
IRS ,
Popular ,
S-Corporation ,
Shareholders ,
Split Dollar ,
Tax Court ,
Tax Policy ,
Tax Returns ,
Trusts