In a recent Chief Counsel Advice (“CCA”) issued by the IRS, the IRS concluded that the taxpayer’s sale of stock did not qualify for the gain exclusion as Qualified Small Business Stock (“QSBS”) under Section 1202 since the business of the corporation was akin to brokerage services.[1] The IRS concluded that the corporation’s business, one…
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Many practitioners think limiting creditors of an LLC member to a “charging order” is a panacea. Other practitioners think the benefits of charging orders are overblown. Who is correct? Can a member’s judgment creditor access LLC property? In addition to a recent case from the Alabama Supreme Court[1], two other recent cases illustrate how charging…
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What are the rights of a creditor to LLC interests to satisfy their claim? That question was at issue in a recent opinion from the Alabama Supreme Court.[1] In that case, the creditor received a “charging order” (discussed below) requiring that distributions from the LLC made to the debtor be instead transferred to the clerk…
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Josh Sage discussed the Corporate Transparency Act (“CTA”) in his January 2021 article,[1] and I wrote a follow-up summary last July.[2] The CTA requires certain U.S. businesses, absent an exemption, to file beneficial ownership information with the Financial Crimes Enforcement Network (“FinCEN”). This could result in burdensome reporting obligations for those businesses. As I discussed…
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Since we’re the cool, diamond-handed, trendy-loving, FUD(fear, uncertainty, and doubt)-crushing, FOMO(fear of missing out)-haters and at the same time professionals, now seems just as good of time as ever to discuss what we are doing at our firm to familiarize ourselves and become more competent in the ever-growing and evolving world of magic internet money,…
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Is your business worth more to the IRS than it is to you? Will you owe estate tax on more value than you receive? A recent tax case illustrates how this is possible.[1] It is very common, even advisable, that closely-held business owners enter into buy-sell agreements limiting transferability of interests and setting forth procedures…
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The Multistate Tax Commission (“MTC”) has recently started its Project on State Taxation of Partnerships (“Project”).[1] The proposed scope of the Project is to consider a number of issues relating to state taxation of income associated with partnership income or partner income from the sale of partnership interests. Importantly, the Project is commencing on the…
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This article will be the final in a series of articles covering the installment method of reporting income. In our first article of the series, we discussed §453 and the basics of the installment method of income tax reporting.[1] As noted in the article, the installment method of reporting income can be a powerful tax…
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In an ongoing breach of contract case,[1] in which the parties contested the treatment of certain transfers as either gifts or as compensation under a contract, the U.S. District Court of Arizona dismissed the portion of the plaintiff’s motion for summary judgment related to “gift tax damages” due to the fact that gift tax labilities…
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On January 1, 2021, the Senate voted to override former President Trump’s veto of the National Defense Authorization Act for Fiscal Year 2021 (“NDAA”), which included the Corporate Transparency Act (“CTA”).[1] The CTA requires certain U.S. businesses, absent an exemption, to file beneficial ownership information with the Financial Crimes Enforcement Network (“FinCEN”), in an attempt…
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