“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

“Yes” to Art, “No” to Tax

Private patronage of the arts. For centuries, artists, museums, and galleries have depended, in no small part, upon the largesse of wealthy families.

Today, as in the past, many of these benefactors are the successful owners or former owners of businesses who can afford to indulge their passion for visual art.[i] Others are investors for whom art represents merely one part of a balanced portfolio.

Continue Reading The Rental of Art Between Related Parties: Applying the Resale Exclusion to the N.Y. Sales Tax

Withdrawing Value

Any tax adviser who has represented closely held businesses and their owners long enough realizes there are certain recurring themes that transcend the otherwise unique characteristics of the industry of which the business is a part, the market or geographic region in which the business operates, the overall economic climate, and even the personal traits of its owners.

Last week we explored a variation on one of these themes – the withdrawal of value from a closely held business on a tax-efficient basis – when we reviewed several of the factors that the owners of a closely held business (organized as a C corporation[i]) should take into account in setting the amount of compensation the business should pay the owners in exchange for their services while preserving the corporation’s ability to deduct such payments in determining its taxable income.[ii]

Continue Reading Constructive Dividends and The Closely Held C Corporation

Double Tax

The shareholders of C corporations have long sought legitimate operational and transactional structures by which they may reduce the double tax hit that is realized when such a corporation distributes its after-tax operating profits or its after-tax sale proceeds to its shareholders.[i] Continue Reading Reasonable Compensation Meets The Principal Shareholder of a C Corp

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?


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”

“It’s My Business”

The owner of a closely held business will often find it difficult to distinguish the business from their own person. That is certainly true for a sole proprietorship. In many cases, unfortunately, the owner’s perspective toward the business does not change appreciably when the business is owned and operated by a legal entity, such as a corporation or a limited liability company, the equity in which is owned by, well, the “owner.” Continue Reading Me, Myself, and I: Tax Liabilities and Dealing with One’s Own Business

“Would I ever leave this company? Look, I’m all about loyalty. In fact, I feel like part of what I’m being paid for here is my loyalty. But if there were somewhere else that valued loyalty more highly, I’m going wherever they value loyalty the most.” Dwight Schrute, The Office

Retaining Talent

A constant challenge in the world of the closely held business, and one that is likely to become even more daunting as Baby Boomers continue to pass their businesses along to younger family members[i] – many of whom may share the older generation’s appreciation for living well, but neither its drive nor its business acumen – is the retention of key employees who are able to operate the business profitably in spite of changes in ownership or leadership within the family and the business. Continue Reading Deferring the Tax Hit on a Grant Equity to an Employee – Are You Prepared to Enforce the Forfeiture Provision?

Taxes and Snowy Weather?

How many of you awoke Saturday to find that the winter storm about which we had heard so much during the preceding days had lived up to its hype?

What was your first thought? “Fudge,” right? Time to shovel the driveway and clean off the car. Slippery sidewalks and roads. Ultimately, slush.

A few of you may have mused aloud about moving to Florida, perhaps oblivious to the cold that visited that state over the weekend.[i]

I’ll admit that I immediately wondered whether some enterprising individuals would show up, armed with the latest in snow removal technology, to offer their services.

Which brings me to another confession: I tried to recall whether snow removal services were subject to New York sales tax. A quick check and, “sugar” – turns out they are.[ii] Continue Reading The Liquidation of a Partner’s Interest Under NYC’s Unincorporated Business Tax

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