The first part of this webinar summarizes the consequences of trusts owning interests in S corporations and partnerships, including planning for and reporting current operations and the sale of the business.
Next, when making estate planning transfers of business interests, one risks an IRS audit imposing gift tax consequences, because valuation involves judgment calls with which the IRS may disagree. To try to protect against adverse audit results, taxpayers may use formulas to define their transfers. Some formulas have protected taxpayers; others have not. Two 2020 Tax Court cases found certain formula transfers fatally flawed.
Finally, when selling a business, a business or its owners may wish to share some of the bounty with employees or other service providers. A 2020 Tax Court case found payments to a business associate to be compensation to that associate rather than a gift.
Why set yourself up for litigation? Consider how (1) declaring compensation and grossing up an employee for taxes and deducting the compensation income, compares with (2) gift tax consequences. If a client is really serious about wanting to provide such payments when selling a business, consider whether planning to shift equity may be tax-efficient.
The live presentation of this webinar was approved for 1.8 hours of general CLE credit in Missouri and 1.5 hours of general CLE credit in California, Illinois, and Texas. If you are interested in receiving credit for watching the recorded presentation, please click here.
*Please note that this is a 90-minute webinar
For technical materials supporting the slides, please see Steve's newsletter.
Steve's current materials, Structuring Ownership of Privately-Owned Businesses: Tax and Estate Planning Implications, are available by emailing email@example.com.
July 28, 2020
Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you (an ‘engagement letter’).
By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and, further, even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you. Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.