The use of a commercial lease to rip off minority owners in a closely held business
The Informed Board Podcast | CEO Succession Planning on a Clear Day
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Episode 8: Minority Oppression in the LLC: Interview With Professor Douglas Moll
In the months preceding the general election in 2024, the owners of many closely held businesses who had not yet given much thought to the disposition of their future estates, including their businesses, decided they should...more
With the looming elections, tax planners have taken time to consider what the future of Estate and Gift Tax planning might be under the new Congress. Every new Congress considers changes to the Internal Revenue Code of 1986,...more
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
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
The Democrats of the House of Representatives have released a much-anticipated tax plan that would significantly impact the federal estate and gift tax system. Importantly, the House could still amend this legislation and the...more
We recently wrote about a window of opportunity to take advantage of the rising estate and gift tax exemption before it sets. It is becoming clearer that the window may be shutting fast. The opportunity to take advantage...more
Closely-held businesses come in all shapes and sizes. Some owners own 100% of their businesses. Some have partners. Some have children in the business. Some do not. A common question that a client asks the business and...more
Peter, Paul, and Mary have done well for themselves. Each has a nice home, a seasonal residence, and a large IRA. Coincidentally, each also has an additional $11 million worth of real estate, savings, brokerage accounts, and...more
A Time for Planning? It’s late August – again. As usual, many business owners are looking forward to having all of their employees back at work and ready to make the final push for a successful year. Others, nearing...more
This is the fourth article in a series about transitions and transactions for midsized companies... Karen Albritton: Growing up in a family business, and now advising closely held companies as a consultant, has given me an...more
The tax changes recently signed into law increased the exemption from federal estate and gift taxes to about twice the prior level. Even though the increase is temporary and will expire at the end of 2025, it changes some of...more
In 2016, we continued to experience a period of relative stability in our federal transfer tax system and have been able to plan without expecting imminent significant changes to the system. Under the American Taxpayer Relief...more
For family business owners who desire to transfer ownership of part of their business to the next generation, the valuation of the business interest is often an important factor to consider. This is especially true for family...more
Partnerships and LLCs are common choices of entity for family-owned businesses, due to their flexibility and the many uses to which they can be put – including pooling of family assets, succession planning, asset protection,...more
It's August of an election---year, and not just any election---year, a presidential election year. So, in less than 80 days, we'll all go to the polls and elect a new president. While Benjamin Franklin might have been right...more
The ability to use transfer and liquidation restrictions in legal documents to reduce the value of an interest in a family-controlled (or “closely-held”) business entity (e.g., partnership, corporation, limited liability...more
Earlier this month, the U.S. Department of the Treasury unveiled its long-awaited proposed regulations targeting valuation discounts commonly used in estate planning, thereby overturning decades of settled law. As drafted,...more
On August 2, 2016, the Internal Revenue Service proposed regulations that would severely limit valuation discounts for lack of marketability and lack of control that taxpayers have historically applied for federal gift,...more
Business Owners May Have Little Time to Act Before Rules Are Finalized - The valuation of a family member's interest in a family business has a major impact on the success or failure of a transfer of such interest to...more
The proposed regulations disregard restrictions that have been used by valuation experts and acknowledged by the courts to reduce valuations. If you are an owner of a closely held entity, recently proposed Treasury...more
On August 2, 2016, the Treasury Department released proposed regulations amending and expanding upon the current regulations to Internal Revenue Code Section 2704. The proposed regulations, if adopted, would affect the...more
Historically, the IRS has closely scrutinized transfers of interests in family-owned entities between family members. In particular, it has sought to curtail the use of discounts to decrease the estate and gift tax value of...more
The Department of the Treasury wants to place limitations on valuation discounts that are currently commonly used to reduce asset values in family-owned and closely-held businesses, in an effort to increase tax revenue. The...more
Low Interest Rates Yield Wealth Transfer Opportunities - Low interest rates can create wealth transfer opportunities. For various wealth transfer techniques, the IRS assumes that a certain minimum interest rate is in...more
Action Item: It is anticipated that Treasury will soon issue new regulations that will affect the valuation discounts applicable to intra-family transfers of interests in closely held entities. It may be advisable to review...more