Hasta La Vista N.Y.

Wealthy individuals continue to leave New York[i] for tax friendlier jurisdictions.

Be Prepared[ii]

Some of these taxpayers take a very methodical approach toward planning for their departure. They consult their tax advisers many months, if not a few years, in advance of any move.[iii] They educate themselves in the rules that New York will apply to determine their tax residence. Then they formulate a plan and implement it in a very deliberate way.Continue Reading Can You Be Sure You’ve Left New York Before The Sale of Your Business? Will It Matter?

Charitable Giving Update

According to a recent report on charitable giving, the number of donors at every level of giving dropped during the first three quarters of 2022.[i] The number of new donors was down by over 19 percent and the number of “newly retained” donors was down by almost 25 percent. The number of individual donors was down 7 percent.

That said, the amount donated was up 4.7 percent. According to the report, however, “the amount of goods and services that money could purchase was down,” citing the rate of inflation.Continue Reading Selling Your Business? Careful of Pre-Sale Contributions of Stock to Charity

What Is It?

Where one stands on an issue of tax law may depend upon context and perspective, including the facts and circumstances one finds relevant, and whom one is counseling or representing.[i] 

Tax advisers often find themselves in situations in which they must ascertain either the “true” nature of a transfer of property between taxpayers[ii] – what they intended – or the character of the property that is the subject of the transfer. The determination of one may influence the outcome as to the other.Continue Reading Sale of Partnership Interests . . . In the Ordinary Course of Business?

Have you ever wondered whether you were barking up the wrong tree? That the solution to a problem may be found, not in the approach to which you were already committed and invested, but in an altogether different direction?

Query whether Congress, if it ever experienced such an epiphany or moment of realization, would be capable of changing course and adopting what may prove to be a more fruitful, though politically more challenging, solution.  Continue Reading The Closely Held Business and The Tax Gap

“Gentleman Farmer”?

Every now and then, some well-meaning colleague will ask how I spend my free time. I usually pause before responding – to gather my thoughts – which prompts them to restate their question with what they believe is greater specificity; for example, how do I relax or what do I do for fun? After further delay on my part, the exasperated colleague will ask what I plan to do in retirement. Continue Reading Generating Tax Losses as a Hobby

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 violate a basic precept of the tax law with respect to the use of business assets[i] – specifically, that their use be limited to furthering the purposes and interests of the business.

This precept emanates from what is perhaps the golden rule for dealings between a closely held business and any of its owners and “related” persons: that they transact with one another on terms that are as close to arm’s length as practicable.
Continue Reading Transacting With One’s Business – Keep It Arm’s Length

The Mid-Terms

With 50 seats in the Senate, the Dems still control that Chamber. A win in the Georgia runoff, however, may lessen the burden for Majority Leader Schumer by, perhaps, neutralizing the significance of a certain member of his own party.[i]

Meanwhile, the GOP has claimed “control” of the House by a very thin margin,[ii] but the party’s leadership is already being challenged by its more conservative members.[iii]

On the other side of the aisle, moderate Dems in the House are certainly taking notice of how well the elections went for the “progressive” wing of their party.[iv]

Politics being what it is, would it surprise you if nothing happened in Congress for the next two years? Probably not.
Continue Reading Thinking About Leaving New York? Don’t Forget to Check Your Federal Tax Return

The Key Person

The closely held corporation is often a fragile creature. Too often, its continued success and well-being are overly dependent upon the continued involvement of one individual – namely, the founder and principal owner of the corporation’s business.

This strong-willed individual may be responsible for the day-to-day management and operation of the business. Their relationships with the customers and vendors of the business, and with the business community generally, may represent a significant part of the corporation’s goodwill.
Continue Reading Trusts, the Death of a Shareholder, and The S Corporation Election

Say It Isn’t So

At different times over the course of the last thirty days or so, I have seen reports describing various plans to increase income taxes and/or wealth taxes on the “rich” that have either been endorsed or proposed by the likes of China’s President Xi Jinping, California’s Gov. Newsom, the Commonwealth of Massachusetts, Democratic Party leaders, and the European Central Bank, as a way to facilitate economic growth, redistribute wealth, and support vulnerable groups.[i]  
Continue Reading LLC as S Corporation: Square Peg Meets Round Hole?