Business

Do This But Not That

Charitable organizations are dependent, in no small part, upon the financial support of many successful business owners. The generosity of these individuals and their organizations may be a manifestation of several factors including, for example, their gratitude to the communities in which they have thrived, a willingness to share their good fortune for the benefit of others, and – less altruistically – a desire for public recognition[i] and the “incidental” benefits arising therefrom.[ii]Continue Reading Transferring the Family Business To A Private Foundation? Are You Sure About That?

NYC Transfer Tax

According to the New York City Comptroller, the City collected approximately $1.13 billion in Real Property Transfer Tax (“RPTT”) in the FY 2024. The Comptroller’s Office has forecast that $1.21 billion of RPTT will be collected in FY 2025.[i] Impressive figures by most measures, but just a drop in the proverbial bucket compared to the City’s total tax revenue for FY 2024 of almost $75 billion,[ii] and of its estimated tax revenue of more than $77 billion for FY 2025.[iii]

Still, the RPTT is no laughing matter when one considers that the tax is imposed at a rate of 2.625% of the purchase price for the “transfer” of commercial “real property,” or of an “economic interest” in such property,[iv] located within the City, where the value of the property is more than $500,000.[v]Continue Reading NYC Transfer Tax, Charities, and Single Purpose LLCs – Are Lenders Beneficiaries?

Tax Receipts

Late last year, the Office of the State Comptroller (the “OSC”) estimated that sales and use tax receipts would increase by 2.3% in the SFY 2024-2025.[i]

The OSC also projected that collections from sales and use taxes would increase by 3.5 percent for SFY 2025-2026.[ii]

Part of this increase is undoubtedly attributable to the efforts of the Department of Taxation and Finance to identify taxpayers who failed to collect and/or remit the correct amount of sales tax.[iii]Continue Reading New York Sales Tax: When a Responsible Person Acts Irresponsibly

Good Intentions

Many successful business owners attribute some part of their success to their community. For some of these owners, it is not enough to simply acknowledge this “debt”; they feel an obligation to share some of their financial success with the community. For example, the owner or business may contribute funds to a local…

Another “Departure”

During the weeks leading up to the Presidential election, the media carried stories about wealthy supporters from each Party who had announced their intention to leave the country if the other Party’s candidate became President.

Of course, none of these individuals stated they would be giving up their U.S. citizenship or green card,[i] probably because they were aware that such a move (pun intended) would trigger an onerous exit tax.[ii]Continue Reading Abandoning N.Y. Domicile – Must the Business Owner Abandon Their N.Y. Business?

Decisions, Decisions

The owners of a closely held U.S. business will have to make many difficult decisions during the life of the business. Among the earliest of these is the so-called choice of business entity, the economic (including tax) consequences of which will be felt by the business and its owners for years to come.Continue Reading Choice of Entity for a U.S. Business- Passthrough Status Matters Beyond the U.S. Border

Enforcement

Earlier this year the IRS announced that, as part of its larger compliance efforts begun last fall under the Inflation Reduction Act,[i] the agency’s stepped-up enforcement activity with respect to high wealth, high income individuals had generated more than $1 billion in collections of past-due taxes.

One would be hard-pressed to seriously dispute that every taxpayer must pay the correct amount of income tax; no more, no less. That means a taxpayer has the right to pay only the amount of tax that is legally due and the right to have the IRS apply all tax payments properly.[ii]Continue Reading Challenge to Collection Due Process? Will Supreme Court Affirm IRS’s Offset of Valid Refund With Disputed Tax Liability?

As we will see shortly, it is often “better to give than to receive,”[i] though this statement begs the obvious question[ii] of whether it is better to do so during one’s lifetime or upon one’s death.

Many well-to-do individuals are seriously deliberating this question[iii] as they contemplate the impending federal elections and consider how the outcome of these contests may influence their plans for the disposition of various assets, including the transfer of such assets, or the value they represent, among members of such individuals’ families.Continue Reading Thinking About Making Taxable Gifts Before the 2026 Sunset?

Not So Happy Law

If given their druthers, most transactional corporate attorneys would prefer to spend their day practicing “happy law,” by which they typically mean transactions that involve capital formation, mergers and acquisitions, joint ventures, business restructurings, and other collaborative-type projects in which the parties have clearly delineated goals, there are definite beginning and end points to the project, and the project is expected to be completed within a relatively short time frame.

The odds are pretty good, however, that a transactional lawyer in the so-called “middle market” will, over the course of their career, become involved in several disputes among the shareholders of a closely held corporation.Continue Reading When A Shareholder Loses Control of Their S Corporation