“Déjà vu All Over Again”[i]
The White House last week released the President’s Budget for the Fiscal Year 2023.[ii] The Budget is ambitious, but its “investments,” we are told, “are more than paid for with tax reforms focused on making sure the rich and the largest corporations pay their fair share.” Sounds familiar, doesn’t it?
Continue Reading Attention Congress: Focus On the Estate Tax Regime; Leave the Income Tax Alone
Assumed Liabilities
If a taxpayer were to sell the assets that comprise the taxpayer’s business, they would realize gain if the amount realized by the taxpayer from the sale is more than the taxpayer’s adjusted basis for the property.[i]
The taxpayer’s “adjusted basis” for a property is their original cost for the property – what they paid for it plus certain costs incurred in connection with the acquisition – increased by certain additions[ii] and decreased by certain deductions.[iii] In general, the adjusted basis may be described as the taxpayer’s unrecovered investment in the property.
Continue Reading Tax Court’s Decision On Assumption of Liability in M&A – A Clean Block or Goaltending?
Segue
Earlier this month, the Treasury released a study in which it examined how transactions in “high-value art” may facilitate the laundering of illicit proceeds.[i] The study also considered efforts that be undertaken by government and the private sector to mitigate money laundering through the high-value art market.
Continue Reading Taxing NFTs as an Investment in “Art”
Last Week
What a week it was.
It began relatively well, with the Cowboys losing the NFC wild card game, albeit to a California team.[i]
It ended disturbingly, with the Arizona Democratic Party censuring Senator Sinema for having opposed the changes to the Senate’s filibuster rule proposed by Senate Majority Leader Schumer.[ii]
What occurred in the interim was anything but reassuring.
Continue Reading Revised Nonresident Audit Guidelines For New York Statutory Residence
Not Selling Your Business This Year?
Beginning shortly before the House Ways and Means Committee released its version of the President’s Build Back Better plan, several posts on this blog have explored the uptick in M&A activity as the owners of many closely held businesses have sought to sell them before the effective dates[i] of any new or increased federal income taxes.
In most cases, the individuals disposing of these businesses were already considering – if not yet committed to the timing of – their exit. Their concern over increased taxes,[ii] however, has accelerated the decision to sell for many; increased taxes translate into fewer net proceeds and a lower return on their years of investment.[iii]
Continue Reading Not Selling Despite Tax Increases? Review the Buy-Sell Agreement Among Owners
Having Fun?
Hope you had a decent weekend. Perhaps you did something interesting, maybe even fun, like some end-of-season apple picking? Or maybe you had a cider donut with some hot coffee at a farm stand you stumbled upon on your way back from attending a football game at a small college? That said, few experiences are better than a midafternoon walk in a quiet park under a blue sky, with the sun on your back like a blanket wrapped over your shoulders to fend off the autumn chill.
Continue Reading Selling to Private Equity? Maybe You Should “F Reorg” First
It Seemed Like a Good Idea
In July of this year, one of my partners, who chairs the board of a local grantmaking public charity,[i] asked if I would present at a CLE program to be sponsored by the charity on October 28 (last Thursday). When I asked if she had a particular topic in mind, she suggested I update the group on the tax features of the President’s $3.5 trillion Build Back Better plan.
Continue Reading The 2022 Federal Budget, Including Tax Changes – Are We There Yet?
If Only
Have you ever wondered what trajectory your career or business would have taken had you done something differently? Have you ever wished you could turn back the clock to correct a mistake, to complete an unfinished task, to approach an old project from another perspective?
Each of us has experienced such “what if?” moments in our professional or business lives.[i]
Continue Reading The Tax “Do-Over” – Is There Such a Thing?
Where Are We?
Have you seen the Triumvirate of late? No, not Julius, Pompey, and Crassus.[i] I’m referring to more contemporary political figures, whose names and exploits are not likely to appear in volumes[ii] that will be studied throughout the world for centuries.
The lower cased “t” triumvirate of which I speak consists of President Biden, Senate Majority Leader Schumer, and Speaker of the House Pelosi.[iii] The group’s standings in polls are anemic.[iv] Not a good place for life-long politicians.
Summertime in Washington
On August 11, the Senate passed the $3.5 trillion budget resolution for the 2021-2022 fiscal year – S. Con. Res. 14, as amended – by a vote of 50 to 49, strictly along party lines, including Democratic Senators Manchin and Sinema who have repeatedly questioned the wisdom of such an expensive measure. The Senate’s overview[i] of the budget resolution began as follows:
On July 13th, 2021, the Senate Budget Committee, with the support of Leader Schumer and President Biden, announced a framework agreement of $3.5 trillion in FY2022 Budget Reconciliation instructions to enact the Build Back Better agenda. The agreement calls for the $3.5 trillion in long-term investments to be fully offset by a combination of new tax revenues, health care savings, and long-term economic growth. In addition, the agreement would prohibit new taxes on families making less than $400,000 per year, and on small businesses and family farms.
Then, on August 24, the House also passed the budget resolution – H. Res. 601 – by a vote of 220 to 212, also strictly along party lines, including every Democrat who threatened to vote against the resolution unless it included a provision that repealed the cap on the SALT deduction, and including those moderates who threatened to oppose the resolution unless the $1 trillion bipartisan infrastructure bill was enacted first, all of whom submitted to the Speaker.[ii]
Continue Reading Tax Increases Are In Sight