Faulty Framework?
The question posed above is not intended to be rhetorical. Rather, it is one that the owners of a closely held business should consider thoroughly before transferring or committing any business assets to a charitable organization.Continue Reading Should Closely Held Businesses Be Charitable?
Losses Weren’t Always Bad
Most tax advisers are aware that, prior to the Tax Reform Act of 1986 (the “TRA”),[i] the Code placed few limitations on the ability of an individual taxpayer to use deductions from a particular activity to offset income from other activities.Continue Reading Partnership Losses But No Outside Basis? Too Bad
What Was Intended?
Transactions between commonly controlled, closely held businesses are often conducted in an informal manner. This is unfortunate because, in the absence of documentation, it is sometimes difficult to discern the parties’ intent with respect to a transaction. This may be especially troublesome for the businesses and their owners where the transaction purports to create a debtor-creditor relationship.Continue Reading Debt or Equity? The Never-Ending Question For Closely Held Businesses
Another Change
Last week BDO confirmed that it was going to convert from an entity organized as a limited liability partnership under state law to one organized as a corporation.
With that, BDO became the latest in a growing list of highly regarded accounting firms to announce that it was going to change, or was considering a change in, its legal structure. Continue Reading Pre-Consolidation Conversions in the Accounting World – Tax Considerations
Decisions
It is often the case that the optimal form of legal entity through which a business should operate, at least for income tax purposes, will depend in part upon the stage of its life cycle[i] in which the business finds itself.
For example, a start-up that is expected to generate losses during its initial years of operation may want to pass those losses along to those of its owners who have made significant capital contributions to the business.Continue Reading Some Observations On Recent Conversions of Partnerships to “C” Corporations
Something’s Wrong
Of late, a not insignificant number of the business owners with whom I’ve been working have raised some concern over whether they are financially prepared for the next stage of their lives.Continue Reading Tax Planning for Business Owners Who Shortchange Themselves
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
Like Peas in a Pod?
What do private, not-for-profit colleges and hospitals have in common?
There are quite a few items that come immediately to mind:Continue Reading Hospital As Educational Organization? The Mayo Clinic’s UBIT Refund Claim
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?
