Since 1995 to the present, the LLC has emerged as the entity of choice for the vast majority of entrepreneurs. This form of business entity owes its success to the flexibility and to the tax benefits that it affords its...more
9/22/2023
/ Beneficiaries ,
C-Corporation ,
Capital Gains ,
Entrepreneurs ,
Federal Taxes ,
Limited Liability Company (LLC) ,
Net Operating Losses ,
Reasonable Compensation ,
S-Corporation ,
Shareholders ,
Small Business ,
Tax Liability ,
Trusts
Last week, the IRS announced “the start of a sweeping, historic effort to restore fairness in tax compliance by shifting more attention onto high-income earners, partnerships, large corporations and promoters abusing the...more
9/14/2023
/ Artificial Intelligence ,
Balance Sheets ,
Compliance ,
Highly Compensated Employees ,
Inflation Reduction Act (IRA) ,
IRS ,
Limited Partnerships ,
S-Corporation ,
Self Employed ,
Self-Employment Tax ,
Tax Court ,
Tax Debt ,
Tax Evasion ,
Tax Liability ,
Taxable Income ,
Wealth Tax
NY’s Almost There-
Back in June of this year, New York’s legislature passed a bill that, if enacted, would create the first state-level public database with information regarding the ownership of limited liability...more
8/24/2023
/ Beneficial Owner ,
Business Entities ,
Business Ownership ,
Civil Liberties ,
Corporate Transparency Act ,
Department of Justice (DOJ) ,
Disclosure Requirements ,
FinCEN ,
IRS ,
Limited Liability Company (LLC) ,
New York ,
Privacy Act of 1974 ,
Tax Audits ,
Tax Fraud ,
Tax Liability ,
Tax Reform ,
Transparency ,
US State Departments ,
Whistleblowers
Death of a Parent-
In the context of a family-owned business, it is often the case that the matriarch or patriarch of the family is also the chief executive of the business. They may have founded the business, or they may...more
8/11/2023
/ Closely Held Businesses ,
Estate Planning ,
Estate Tax ,
Family Businesses ,
Heirs ,
Insolvency ,
Internal Revenue Code (IRC) ,
IRS ,
Spouses ,
Surviving Spouse ,
Tax Court ,
Tax Liability ,
Tax Liens ,
Tax Returns ,
Transfer Taxes ,
Trusts
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
Something’s Wrong-
Of late, a not insignificant number of the business owners with whom I’ve been working have raised some concern over whether they are financially prepared for the next stage of their lives.
...more
6/6/2023
/ Business Expenses ,
Business Ownership ,
CEOs ,
Compensation ,
Dividends ,
Interest Rates ,
Investors ,
IRS ,
Tax Court ,
Tax Liability ,
Tax Planning ,
Transfers
The Supremes-
The Constitution has figured prominently in the news of late. In the days preceding the initial discussions among members of the Administration and the Congressional leadership regarding the debt ceiling,...more
5/24/2023
/ Debt Ceiling ,
Debt Collection ,
Federal Budget ,
Financial Records ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Investigations ,
IRS ,
Notice Requirements ,
SCOTUS ,
Summons ,
Tax Liability ,
Third-Party
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
According to a report issued by the National Association of Realtors a couple of days ago, last year saw a large outmigration of people from California and New York, while Florida and Texas experienced a comparably large...more
2/3/2023
/ Beneficiaries ,
Closely Held Businesses ,
Domicile ,
Estate Planning ,
Exemptions ,
Gifts ,
Grantor Trusts ,
Income Taxes ,
New York ,
Non-Residents ,
Settlors ,
State and Local Government ,
Tax Liability ,
Trusts ,
Value Appreciation ,
Wealth Tax
Last Friday, December 30, 2022, during the final hours of the 117th Session of Congress, the House Ways and Means Committee – through which all tax legislation passes – released redacted versions of six years of Mr. Trump’s...more
1/5/2023
/ Audits ,
Business Expenses ,
Business Losses ,
Closely Held Businesses ,
Donald Trump ,
IRS ,
Loans ,
Tax Avoidance ,
Tax Legislation ,
Tax Liability ,
Tax Reform ,
Ways and Means Committee
Don’t Be Unreasonable-
Much has been written of late regarding the payment by a business of various personal expenses incurred by its owner or certain key employees. The payment of an owner’s personal expenses appears to...more
12/16/2022
/ Arms Length Transactions ,
Business Expenses ,
Business Ownership ,
Closely Held Businesses ,
Compensation ,
Family Businesses ,
IRS ,
Personal Use ,
Reasonable Compensation ,
Selling a Business ,
Tax Deductions ,
Tax Liability ,
Taxable Income
“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
I recently encountered an interesting situation in which someone suggested that a grantor trust be decanted into a non-grantor trust before the end of the taxable year. The reason? To avoid the special interest charge that...more
8/17/2022
/ C-Corporation ,
Capital Gains ,
Decanting ,
Grantor Trusts ,
Installment Agreements ,
IRS ,
Limited Liability Company (LLC) ,
Partnerships ,
Pass-Through Entities ,
Spouses ,
Tax Liability ,
Tax-Deferred Exchanges ,
Trusts
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
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
State Finances-
Much has been written over the last few weeks about the unprecedented financial cushion that many states have accumulated thanks to federal support prompted by the pandemic and larger-than-expected tax...more
5/24/2022
/ Adjusted Gross Income ,
Administrative Law Judge (ALJ) ,
Audits ,
Federal Aid ,
IRS ,
Limited Liability Company (LLC) ,
New York ,
State Budgets ,
State Taxes ,
Tax Appeals ,
Tax Liability ,
Tax Returns ,
Tax Revenues ,
Taxable Income
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
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
3/11/2022
/ Audits ,
Burden of Proof ,
C-Corporation ,
Closely Held Businesses ,
Corporate Bonuses ,
Corporate Net Income ,
Disguised Sales ,
Dividends ,
Income Taxes ,
IRS ,
Job Duties ,
Midsize and Large Business Loans ,
Multi-Factor Test ,
Purchase Price ,
Reasonable Compensation ,
Salary/Wage History ,
Sale of Assets ,
Shareholders ,
Tax Liability ,
Tax Returns
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
“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
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
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
If Only-
Have you ever wondered what trajectory your career or business would have taken had you done something differently? Have you ever wished you could turn back the clock to correct a mistake, to complete an...more
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