Business

Recap

Last week, we considered several of the revenue proposals included in the Biden Administration’s 2022 Budget that are probably of interest – or should we say, “of concern”? – to the owners of closely held businesses.[i]

Continue Reading Biden’s 2022 Revenue Proposal, Profits Interests, and The Alchemy of Compensation

Dream Until the Dream Come True?[i]

Ask the owner of a closely held business to describe their most recently recurring nightmare and you are likely to get an earful regarding the prospect of an increased federal income tax on their profits, an increased federal tax on the long-term capital gain from the sale of their business, the imposition of a federal mark-to-market tax on the gain accrued in their business at the time of their death, and the imposition of a federal estate tax determined on the basis of a greatly reduced exclusion amount.[ii]

Basically, the worst parts of Mr. Biden’s tax proposals, as set forth in his American Families Plan.[iii]

Ask the same business owner to describe their fondest dream –  no, not that one –  and they may describe a scenario in which they sell their business for cash but, at the same time, are able to defer the recognition of the gain for many years.[iv]

Too Good to be True?
Continue Reading Cash in Hand, Tax Deferral, Monetized Installment Sales: No, You Can’t Have It All

“Yeah, I’m the Tax Man”[i]

Last week, several media outlets reported that Mr. Biden will soon propose that Congress increase the federal income tax rate applicable to long-term capital gains recognized by individual taxpayers.[ii]

The time and place at which this and other changes to the Code are expected to be proposed is this Wednesday, April 28, when the President, at the invitation of House Speaker Pelosi, will appear before a Joint Session of Congress[iii] to advocate for his $2.3 trillion American Jobs Plan.[iv]

These reports should not have surprised anyone. After all, candidate Biden ran on a platform that called for increases to the individual federal income tax rates applicable to items of both ordinary income and long-term capital gain.[v] As President, Mr. Biden has not wavered from this position.

Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman
Yeah, I’m the taxman

Continue Reading Biden’s Proposed Income Tax Increases And the Sale of the Baby Boomer Business