The Biden Presidency: How Will Cannabis Business Be Taxed?
Wither the Weed? It has been one month since Mr. Biden’s inauguration as President of the United States. Among the…
February 22, 2021
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February 22, 2021
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Statutory Residence for the “Former” New Yorker
“Tax the Rich” in N.Y. Over the last few months, we’ve considered on several occasions how Albany may respond to…
February 16, 2021
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February 16, 2021
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Budget Resolutions, Reconciliation and Tax Increases: Is it Time for the Weight-Challenged Individual to Sing?
Procedural Mumbo Jumbo? [i] Remember your civics class in elementary school? * * * . What’s that? Not really. *…
February 08, 2021
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February 08, 2021
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Turning a Hobby into a Business And into Tax Trouble
“Find a Hobby” Over the years, many colleagues, friends and family who have observed my work habits have suggested, with…
February 01, 2021
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February 01, 2021
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Taxes In New York’s FY 2022 Budget
Budget Time in New York Last week, we reviewed some of the tax measures discussed by Governor Cuomo in his…
January 25, 2021
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January 25, 2021
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New York: Deficits, Taxes and 2021
Only 347 Days to Go What a year it has already been, and we are just beginning the third full…
January 18, 2021
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January 18, 2021
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Can a Partnership’s Payment to a Partner for Services Not Be Treated as Such for Purposes of Sec. 199A?
Memory Lane You may recall how clear it became, as the bill that would become the Tax Cuts and Jobs…
January 12, 2021
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January 12, 2021
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The Federal Estate Tax in 2021: What Might We Expect? What Can We Do?
Happy New Year? Ask anyone outside the United States what comes to mind when they think about an American New…
January 04, 2021
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January 04, 2021
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State Taxation of Telecommuting Employees And Their Nonresident Employers
Mending Walls “Good fences make good neighbors,” or so Robert Frost’s neighbor from “beyond the hill” says to him when…
December 28, 2020
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December 28, 2020
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The Year-End: A Time for Ignoring the Holidays And Disclaiming Gifts (for Tax Purposes)
Happy Holidays? Bah Humbug! The “holiday season” is once again upon us. A time to spend with family and friends,…
December 21, 2020
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December 21, 2020
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New York’s Proposed “Billionaires’ Tax” – Bad Idea
Will They Leave? Over the years, the Democrats in Albany have regularly made noise about increasing the rates at which…
December 14, 2020
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December 14, 2020
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Year-End Gifting of Equity in a Business — With an Outstanding PPP Loan?
“Annus Horribilis” Just over three weeks to go, then 2020 will be behind you. But don’t drop your guard just…
December 07, 2020
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December 07, 2020
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The IRS, Forgiven PPP Loans, and Business Deductions: Once Was a Mistake, Twice Is an Inexcusable Decision
It has been more than eight months since the enactment of the CARES Act,[i] yet here we are, with the…
November 30, 2020
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November 30, 2020
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Taxing Cannabis During the Pandemic
How Are You Doing? How are you coping with social distancing? Are you working remotely? If so, has it been…
November 23, 2020
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November 23, 2020
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New York’s Post-Election Tax Environment for Business Owners
Something Is Rotten There’s a gray pall hanging over New York that has clouded the judgement of many politicians, and…
November 16, 2020
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November 16, 2020
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New York Business, Nonresident Telecommuters and the Taxation of Wages Earned Remotely
Drums. Do you hear them? Along the western shore of the Hudson River.[i] It seems that the unrest which began…
October 26, 2020
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October 26, 2020
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The “Art” of Operating Foundations: A Public-Private Venture
In the Beginning From the dawn of recorded history, those who have the means have purchased or otherwise financed the…
October 19, 2020
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October 19, 2020
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Forget Congress: The IRS Needs to Reverse Course On The Deduction of Business Expenses Paid with PPP Loan Proceeds
Round Two “Painful social lockdowns in Europe and some American states helped blunt the coronavirus. Now, amid a fitful reopening,…
October 13, 2020
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October 13, 2020
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The Election, the Democrats’ Tax Proposals, and Year-End Tax Planning: Caught Between Scylla and Charybdis
What a Week There is no denying that last week’s political events were historic; one can only hope they were…
October 05, 2020
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October 05, 2020
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Intra-Family Loan: A Gift Alternative In Turbulent Times?
Woe to Us? We live in strange times. The coronavirus pandemic hit the United States hard, the scientific community fears…
September 28, 2020
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September 28, 2020
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Continuing Economic Distress: Withholding Taxes and the Risk of “Self-Help”
Stimulus Legislation Limbo In has been 192 days since the President declared a national emergency concerning the COVID-19 outbreak.[i] Across…
September 21, 2020
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September 21, 2020
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The Threat of Higher Taxes, & The Sirens’ Song of Tax-Saving Schemes
What a Mess A “perfect storm” may be defined as a critical state of affairs arising from the convergence of…
September 14, 2020
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September 14, 2020
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NYC Real Estate: Post-Virus Tax Planning Can Help
NYC Real Estate on the Ropes In March of this year, the Department of Homeland Security classified real estate as…
September 08, 2020
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September 08, 2020
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Transfer of Funds between Related Entities – Indebtedness or Something Else?
A closely held business may come to our firm for any number of reasons. The owners may be selling the…
August 31, 2020
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August 31, 2020
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Responding to the Democratic Party’s Tax Plans
The Convention The Democratic Party’s “virtual” convention last week seems to have gone pretty well. All the stars of the…
August 24, 2020
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August 24, 2020
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Biden’s Tax Proposals for Capital Gain, Like Kind Exchanges, Basis Step-Up & the Estate Tax – Tough Times Ahead?
“The board is set. The pieces are moving. We come to it at last.” With these words, Gandalf the White…
August 17, 2020
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August 17, 2020
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Should Business Corporations Be More Charitable?
Today’s post briefly explores whether the term “corporate charity” is an oxymoron. It also tries to provide a framework for…
August 11, 2020
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August 11, 2020
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Virus to Economic Shutdown to Bankruptcy? Not Necessarily, But Be Prepared
Bankruptcy Resurgent? The economic shutdown, and the ensuing recession, triggered by the COVID-19 pandemic have jeopardized the survival of many…
August 03, 2020
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August 03, 2020
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An S Corporation in New York City: Eschew Obfuscation – Or Not
NYC: A “Helluva” Town, for S corps[i] Of late, I’ve received a surprising number of inquiries regarding the taxation of…
July 27, 2020
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July 27, 2020
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The Federal Anti-Deferral Rules for Foreign Income –Just a Reminder, There’s No Easy Way Out
It’s Complicated Coming to grips with the U.S. tax treatment of the foreign-sourced income of a closely held domestic business,…
July 20, 2020
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July 20, 2020
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Wealth Inequality, COVID-19, Recession, The 2020 Election & The Estate Tax
Politics and Wealth Inequality As we approach the presidential convention season,[i] and the election campaign that will follow, the thoughts…
July 13, 2020
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July 13, 2020
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Out of New York, But Still Being Taxed By New York? Look to the Source
New York Diaspora?[i] Like most every other state in the Union, New York has experienced its share of fiscal stress…
July 06, 2020
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July 06, 2020
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Compensating Management with Equity In the Post-COVID World
Business is back . . . Sort of As the country begins its hoped-for recovery from the disruptive economic effects…
June 29, 2020
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June 29, 2020
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Liquidating Trusts, Reopening the Economy, and Creditors’ Rights
Bad Times Of course, you’ve noticed that we’re in the midst of an economic mess. The nearly complete shutdown of…
June 22, 2020
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June 22, 2020
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The Like-Kind Exchange of “Real Property” According to the Proposed Regulations
The Taxable Exchange As a general rule, a taxpayer’s exchange of one property for another property is treated as a…
June 15, 2020
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June 15, 2020
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Conformity, the Lockdown, and New York’s Audit of Like-Kind Exchanges
Conforming About sixty years ago, New York revised its personal income tax law to achieve close conformity with the Federal…
June 08, 2020
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June 08, 2020
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“Family Investing” As a Trade or Business? In the Time of the Lockdown? Seriously? Life Goes On
Go Figure As of last Wednesday night, the SBA’s website reported that almost 4.5 million businesses had borrowed more than…
June 01, 2020
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June 01, 2020
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Deductions for PPP Covered Expenses – Almost There; How Will Your Business Use the Tax Savings?
What Did You Do Last Night? “Friday night, May 15 . . . You didn’t watch the roll call vote…
May 18, 2020
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May 18, 2020
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Opting Out of the PPP? There Are Some Tax Benefits to Consider
So Much Promise I am not embarrassed to say that I was excited at the introduction of the bill that…
May 11, 2020
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May 11, 2020
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PPP Loan Forgiveness and The Denial of Deductions for Covered Expenses – What’s Wrong with the IRS’s Position?
The Program The Paycheck Protection Program[i] has been welcomed by many as the cornerstone of the CARES Act.[ii] It was…
May 04, 2020
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May 04, 2020
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Tax Considerations as Businesses Prepare to Emerge from the COVID-19 Shutdown
We’ve Been Better On March 1, 2020, New York had its first confirmed case of the coronavirus.[i] On March 6,…
April 28, 2020
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April 28, 2020
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“Give and It Shall Be Given Unto You” – ? – Charitable Giving After the CARES Act
The Code as a Tool The Internal Revenue Code is one of the tools employed by Congress to encourage certain…
April 20, 2020
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April 20, 2020
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Real Estate, CARES and Taxes: The Response to COVID-19
The Coronavirus Aid, Relief and Economic Security (“CARES”) Act became law[i] on March 27, 2020. Almost immediately, “small” businesses[ii] from…
April 13, 2020
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April 13, 2020
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Coronavirus vs. the Code: Today . . . But What About Tomorrow?
April 06, 2020
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Extended Filing and Payment Deadlines for Federal Transfer Taxes
The IRS has determined that any person required to pay Federal gift tax or generation-skipping transfer tax or to file…
March 31, 2020
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March 31, 2020
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Think Before You Gift, But Don’t Take too Long
Optimal Timing? During the last twenty years, there have been a number of times during which the owners of closely…
March 30, 2020
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March 30, 2020
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Coronavirus & Business Losses: Suspend or Repeal – The TCJA Loss Limitation Rules
The Lockdown We are in a Coronavirus-induced lockdown. Most places of business are either closed or are open on a…
March 23, 2020
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March 23, 2020
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Recapitalizing Debt To Defer Payment of the Estate Tax – Good Idea?
Estate Planning 101 A basic precept of effective estate planning is for a member of an older generation to transfer[i]…
March 16, 2020
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March 16, 2020
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One Corporation, One Property, Two Shareholders – Can They Be Separated? Without Tax?
A Basic Principle Do you remember the scene from “History of the World Part I” when Mel Brooks, in the…
March 09, 2020
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March 09, 2020
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Reliance on the Tax Adviser – There Are Limits
We’re well into the income tax return “preparation-n-filing” season. It’s the time of year during which many businesses and their…
March 02, 2020
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March 02, 2020
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Sometimes, You Want To Be “At Risk” – Even In Healthcare
Keeping It Real Contrary to what has long been an all-too-popular belief,[i] there is a method to the Code. That…
February 24, 2020
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February 24, 2020
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Where New York State and City Transfer Taxes Meet: Does A Lease Make Sense?
When It Rains Sometimes you go for weeks without having to consider a particular tax issue in any depth. Then,…
February 18, 2020
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February 18, 2020
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Sale of Stock + Target’s Capitalized Costs = Creation of Intangible? Nope
Sale of Stock Ask a business owner to identify the parties to an agreement for the purchase and sale of…
February 10, 2020
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February 10, 2020
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States’ Rights, State Taxation, And . . . New York “S” Elections?
How Did We Get Here? On September 9, 1776, Congress officially adopted “United States” of America as the name of…
February 03, 2020
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February 03, 2020
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C’mon New York, Give Me Some Credit
The State of NY Tax Last week, New York’s Governor Cuomo released his proposed budget for the State’s 2021 fiscal…
January 27, 2020
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January 27, 2020
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When Limited Liability Yields To Transferee (Personal) Liability
“Limited Liability” The experienced or well-informed investor recognizes that there is an element of risk in every business venture. They…
January 20, 2020
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January 20, 2020
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Taxation of a Medical Marijuana Business – How Will the Ninth Circuit Hold?
The Stage is Set On December 3, 2019, Taxpayer timely[i] filed a notice of appeal from a decision of the…
January 07, 2020
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January 07, 2020
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Taxpayer: “It’s Worthless” IRS: “Wrong, We See Value There” Is Value in the Eye of the Beholder?
“Ten, Nine, Eight . . .” This is the final weekend of the final month of the final year of…
December 30, 2019
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December 30, 2019
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Carried Interest, Qualified Small Business Stock, And Excluded Gain: So Happy Together?
Water, Water Everywhere, Nor Any Drop to Drink[i] At the beginning of every week, after posting that week’s article, I…
December 23, 2019
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December 23, 2019
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Sale of a Contract: Ordinary v. Capital – Round Two
A couple of years ago, this blog carried an article that briefly considered whether the gain realized by a taxpayer…
December 16, 2019
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December 16, 2019
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The Death of a Partner: Out With the Old Taxable Year, In With the New?
I once heard it said that death keeps no calendar.[i] That may be, but it can sure unsettle a partnership’s…
December 09, 2019
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December 09, 2019
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Business Donates Partnership Interest to Charity, Partnership Sells Real Property, NYC Taxes Charity on the Sale?
“Charitable Behavior” Our society is fortunate that so many business owners are charitably inclined. In many cases, their charitable activities…
November 25, 2019
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November 25, 2019
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When a New York Exempt Resident Trust Meets the Sale of a Business
Imagine, if you will, the owner of a closely held business. Although the business has done well, the owner believes…
November 12, 2019
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November 12, 2019
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I Own the Business, The Business Owns the Assets, I Own the Assets, Right?
Personal Use of Business Assets “But it’s my business. I own it.” How many times have you heard this response…
November 04, 2019
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November 04, 2019
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Tax-Free Spin-Off? That May Depend . . . On Post-Spin-Off Events
The Break-Up After a tense period of disagreement and stalemate, the threaten of litigation,[i] the ensuing economic and emotional stress,…
October 21, 2019
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October 21, 2019
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Statutory Resident? Selling Your New York Business? Welcome to Double Taxation?
General Principles Many business owners who reside in New York, and whose business is headquartered in the state, pay income…
October 15, 2019
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October 15, 2019
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Valuation, Hindsight, and Taxes
The Benefit of Knowing Monday morning quarterbacking – the connotations are anything but positive. Life is full of instances in…
October 07, 2019
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October 07, 2019
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Taxable M&A and the Unwanted Asset
Under One Roof I sometimes wonder at the number of corporations that own real property. It is often the case…
October 01, 2019
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October 01, 2019
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PE Fund, Foreign Investor, No Blocker, & Partnership Rollover – Hiccup?
Most transactions have their share of hiccups. Some cases are more serious than others. Generally speaking, they originate with the…
September 23, 2019
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September 23, 2019
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Statutory Residence in NY: The “Permanent Place of Abode” Test Is in Need of Repair
Moving To Florida? A few days ago, one of the daily tax services reported that the billionaire investor and businessman,…
September 16, 2019
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September 16, 2019
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Selling S Corporation Stock – Are You Sure?
Still a Valid S Corporation? Much has been written regarding the limitations of the S corporation, especially the requirement that…
September 09, 2019
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September 09, 2019
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Gifting Business Interests: Will the Parent’s Tax Treatment Be Visited Upon the Child?*
The Tax Gene? King of Swamp Castle: One day, lad, all this will be yours. Prince Herbert: What, the curtains?…
September 03, 2019
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September 03, 2019
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Valuing Closely Held Businesses: The Reality of Economic Control?
A Time for Planning? It’s late August – again. As usual, many business owners are looking forward to having all…
August 26, 2019
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August 26, 2019
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Employer-Related Scholarships & The Closely Held Business
Education Equals Indebtedness? We’re more than halfway through the month of August and many college students are returning to their…
August 19, 2019
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August 19, 2019
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Closely Held C Corporations, Constructive Dividends, and More
Choice of Entity The owners of a closely held business are generally free to select the form of business entity…
August 12, 2019
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August 12, 2019
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Business Succession and Trust Fund Taxes: Lessons for Owners and Their Beneficiaries?
Teach Your Children Well [I] It may be the dream of every parent who owns a closely held business that…
July 22, 2019
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July 22, 2019
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Escape from New York — It Will Cost You
If I Had a Dollar . . . How many times have you sat with a client who wants to…
July 16, 2019
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July 16, 2019
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Monetized Installment Sales: What Are They About?
Too Good . . .? What if I told you that you could sell your property today, receive cash in…
July 01, 2019
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July 01, 2019
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The Pervasive Related Party Rule And the Like Kind Exchange
Counting Days Do you know what June 29, 2019 is? Of course you do. It’s a Saturday. It’s also the…
June 24, 2019
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June 24, 2019
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S’s, ESBT’s, NRA’s – AOK?
Letters, acronyms, initialisms[i] – they seem to slip into every post these days. It has always been a goal of…
June 18, 2019
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June 18, 2019
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“Checking the Box” – For a Pass-through Entity In Bankruptcy?
Tax and bankruptcy: “Can two divorced men share an apartment without driving each other crazy”[i] or “Two great tastes that…
June 10, 2019
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June 10, 2019
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Stock Sales and Employee-Minority Shareholders: What Does It Take to Make a Deal?
If you’ve been representing closely held businesses long enough, then the “conversation transcribed” below should sound familiar to you. I…
June 03, 2019
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June 03, 2019
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The Section 199A Deduction & Effectively Connected “Foreign” Income
It’s Not Easy The owners of many closely held businesses recently filed federal income tax returns on which they claimed,…
May 29, 2019
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May 29, 2019
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Is Timing Everything? Only Time Will Tell: Small Business Stock and the Reduced Corporate Tax Rate
The Tax Law In theory, the primary purpose of the income tax, as a body of law, is to raise…
May 20, 2019
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May 20, 2019
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Guarantees: Tax Considerations and Surprises
Don’t Take It Lightly Regardless of who or what they are, taxpayers have to be careful of saying things like,…
May 13, 2019
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May 13, 2019
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Determining the Value of an S Corp
Beyond Income Tax Over the last several weeks, we have explored various aspects of the choice of entity dilemma that…
May 06, 2019
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May 06, 2019
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Insured to Captive: “More, Charge Me More, Charge Me More . . .” Premiums?*
It’s Not All About 2017 A casual review of the recent tax literature may leave a “lay person” with the…
April 29, 2019
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April 29, 2019
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Post-2017: Is It Time To Kick Your Corporation’s “S”?
Choice of Entity Following the enactment of the Tax Cuts and Jobs Act,[i] tax advisers were inundated with inquiries from…
April 22, 2019
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April 22, 2019
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Current Distributions & Partial Liquidations: Corps vs. Partnerships
“You Must Choose, But Choose Wisely.”[I] The enactment of the Tax Cuts and Jobs Act,[ii] and its undeniable bias in…
April 16, 2019
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April 16, 2019
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Checked the Box? Feeling GILTI Now?
Once Upon A Time I recently recalled a client that was referred to us a few years back, shortly before…
April 08, 2019
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April 08, 2019
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Deferring Real Property Gain: Like Kind Exchange or Opportunity Fund? (Part II)
Yesterday, in Part I, we reviewed the like-kind exchange rules. https://www.taxlawforchb.com/2019/04/deferring-real-property-gain-like-kind-exchange-or-opportunity-fund-part-i/ Now we turn to the new kid on the…
April 03, 2019
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April 03, 2019
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Deferring Real Property Gain: Like Kind Exchange or Opportunity Fund? (Part I)
The Act Among the business transactions on which the Tax Cuts and Jobs Act[i] has had, and will continue to…
April 02, 2019
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April 02, 2019
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Succession Planning and Charitable Bequests: It Pays to Sweat the Details
After Me, Who Cares? In the context of a family-owned business, managerial succession and the transfer of ownership – not…
March 25, 2019
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March 25, 2019
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U.S. Individuals Electing to be Treated as Corporations: American Werewolves?
The Tax Cuts and Jobs Act[i] has been called a lot of things by a lot of different people.[ii] Certain…
March 19, 2019
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March 19, 2019
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Choice of Entity? I Choose A . . . No, I Meant B . . . Wait, Can I Try Again?
Choice of Entity The owners of a closely held business will confront many difficult decisions during the life of the…
March 11, 2019
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March 11, 2019
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New York City’s Unconscionable . . . Unexpected . . . Unincorporated Business Tax – A Glimpse of Things to Come?
Hell of a Town Ask most New Yorkers what New York City has in abundance and you’ll get responses that…
March 04, 2019
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March 04, 2019
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Timing the Sale of a Business . . .To Maximize the Sec. 199A Deduction?
Yes, it sounds odd. It is also seems to be at odds with this blog’s constant refrain of “Thou shalt…
February 25, 2019
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February 25, 2019
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Establishing Taxpayer Intent – Why It Matters
“You Know What I Meant” In order to determine the income tax consequences of a given transaction, a court must…
February 19, 2019
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February 19, 2019
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A Closely Held Qualified Opportunity Fund? It’s Possible, But It’s Not Easy
Committed to a Zone Last week’s post[i] considered how the newly-enacted qualified opportunity zone (“QOZ”) rules seek to encourage investment…
February 11, 2019
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February 11, 2019
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Sale of a Business and Qualified Opportunity Funds: Deferral, Exclusion, and . . . Risk?
A lot has been written about the tax benefits of investing in a Qualified Opportunity Fund. Some have suggested that…
February 05, 2019
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February 05, 2019
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Rental Real Estate and the Sec. 199A Deduction: Round Two
Shortly after Section 199A was added to the Code at the end of 2017, and again after the IRS proposed…
January 29, 2019
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January 29, 2019
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“It’s Ordinary Income – No, I Meant to Say Capital Gain”
We Want You One of the most challenging problems facing a business is how to attract, and then retain, qualified…
January 22, 2019
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January 22, 2019
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It’s a Business . . . No, It’s a Charity . . . Wait – It’s a Charity That Is Treated Like a Business?
The Business-Charity Connection As our readers know, this blog is dedicated to addressing the tax-related business and succession planning issues…
January 15, 2019
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January 15, 2019
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Unwinding an Unwanted Transaction
Rescission As kids playing ball, we learned about the “do-over” rule, pursuant to which the player in question was allowed…
January 07, 2019
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January 07, 2019
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All in the Family: The Closely Held Business, the Private Foundation and Indirect Self-Dealing
Home for the Holidays? Our last post considered the division of a business between family members as a means of…
January 02, 2019
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January 02, 2019
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To Gift or Not to Gift? The Time May Have Arrived
The Joy – and Tax Benefits – of Gifting As we enter the “season of giving” and the end of…
December 07, 2018
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December 07, 2018
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Trusts and the Section 199A Deduction
If there was one part of the Tax Cuts and Jobs Act (“TCJA”) that estate planners were especially pleased to…
November 26, 2018
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November 26, 2018
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Plan Ahead to Avoid Tax Surprises and Temptations
“I Didn’t See That Coming” Over the years, I have seen many business owners blanche when they learn how much…
November 19, 2018
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November 19, 2018
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The Nonresident Taxpayer vs New York – “Know When to Fold ‘Em”[i]
NY’s Tax Jurisdiction Last week we considered New York’s “statutory residence” rule pursuant to which an individual domiciled outside of…
November 13, 2018
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November 13, 2018
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Doing Business in New York? Domiciled Elsewhere? Paranoid over New York Residency Status?
Welcome (?) to NY The Tax Foundation recently issued its annual State Business Tax Climate Index. The 2019 Index compares…
November 05, 2018
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November 05, 2018
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Family Limited Partnerships – They’re Still Out There (?)
Dr. Wallace Wrightwood: “You’ve seen hundreds, thousands of pigeons, right?” George Henderson: “Of course.” Dr. Wallace Wrightwood: “Have you ever…
October 30, 2018
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October 30, 2018
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Split-Dollar Life Insurance and S Corps: Distribution or Compensation?
How Does It Work? Many employers struggle to hire and retain key employees. In addressing this challenge, employers will sometimes…
October 22, 2018
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October 22, 2018
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Corporate Distribution: Return of Capital or Capital Gain?
Ode to a Dividend It sounds relatively simple: A distribution of property made by a regular “C” corporation to…
October 17, 2018
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October 17, 2018
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Assignment of Income And Charitable Contributions of Closely Held Stock
But I Don’t Want to Pay Any Taxes! I was recently speaking to an older client who told me that…
October 08, 2018
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October 08, 2018
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Private Foundations and Business Ownership: A New Day?
Many not-for-profit organizations are dependent, in no small part, upon the generosity of successful businesses and their owners. The latter…
October 01, 2018
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October 01, 2018
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Employment Taxes: Reliance, “Disability” and Reasonable Cause
“Life” Goes On In light of all the attention given to the reams of regulations recently proposed under the Tax…
September 24, 2018
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September 24, 2018
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The Section 199A Deduction . . . and M&A?
I realize that the last post began with “This is the fourth and final in a series of posts reviewing…
September 17, 2018
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September 17, 2018
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The Proposed Sec. 199A Regs Are Still Here! Part Four
This is the fourth[i] and final in a series of posts reviewing the recently proposed regulations (“PR”) under Sec. 199A…
September 11, 2018
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September 11, 2018
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The Proposed Sec. 199A Regs Are Here! Part Three
This is the third in a series of posts reviewing the recently proposed regulations (“PR”) under Sec. 199A of the…
September 06, 2018
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September 06, 2018
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The Proposed Sec. 199A Regs Are Here! Part Two
This is the second in a series of posts reviewing the recently proposed regulations (“PR”) under Sec. 199A of the…
September 05, 2018
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September 05, 2018
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“The Proposed Sec. 199A Regs are Here!”[*] Part One
What follows is the first in a series of posts that will review the long-awaited proposed regulations under Sec. 199A…
September 04, 2018
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September 04, 2018
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Bonus Depreciation: Proposed Regulations and M&A
Earlier this month, the IRS proposed regulations regarding the additional first-year depreciation deduction that was added to the Code by…
August 27, 2018
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August 27, 2018
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Tax Treatment of Success-Based Fees in M&A
Transaction Costs It is a basic principle of M&A taxation that the more a seller pays in taxes on the…
August 20, 2018
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August 20, 2018
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More Related Party Transfers
Last week, we considered the proper tax treatment for a transfer of funds from a parent corporation to its…
August 13, 2018
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August 13, 2018
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Related Company Transfers: Debt or Equity? Capitalized or Expensed?
It is often difficult to determine the proper tax treatment for the transfer of funds among related companies, especially when…
August 06, 2018
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August 06, 2018
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Shareholders, Transferee Liability, And Corporate Income Tax
The Corporate “Shield” Ask any shareholder of a closely held corporation whether they may be held liable for the tax…
July 30, 2018
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July 30, 2018
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It’s Not an LLC, It’s Not an LP, But Is it a Partnership?
One of the thorniest tasks to confront a tax adviser may be having to determine whether the business or investment…
July 23, 2018
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July 23, 2018
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Shareholder Oppression, S Corps, & A Second Class of Stock?
Woe to the Oppressed Shareholder As I write this post on Bastille Day, I am reminded how an oppressed people,…
July 16, 2018
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July 16, 2018
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Obtaining Tax Return Information: Taxpayer’s Standing, and Timely Requests
Tax Returns Are Like Paintings [I] A not insignificant portion of our tax practice involves disputes among the shareholders and partners…
July 09, 2018
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July 09, 2018
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Choice of Entity, Shareholder Disputes, and the Discovery of Tax Returns
Decisions, Decisions The reduction in the Federal income tax rate for C corporations, from a maximum of 35-percent to a…
July 02, 2018
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July 02, 2018
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Cannabis, Business Expenses, and the Code
Last week’s post may have left some readers feeling lightheaded or anxious. [1] It is highly unlikely that this week’s post…
June 25, 2018
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June 25, 2018
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S Corps, CFCs & The Tax Cuts & Jobs Act
Pro “C” Corporation Bias? Although closely-held businesses have generally welcomed the TCJA’s[i] amendments to the Code relating to the taxation…
June 18, 2018
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June 18, 2018
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Learning from the Mistakes of Other Taxpayers
“You Mess with the Bull . . .” An often-explored theme of this blog is the frequency with which similarly…
June 04, 2018
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June 04, 2018
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Debt . . . Worthless Debt . . . No Debt at All?
It is said that repetition is the mother of all learning. It is also said that insanity is repeating the…
May 29, 2018
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May 29, 2018
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Shifting Business Activities Between Related Entities?
Metamorphosis [i] By now, most readers have heard about the benefits and pitfalls of “checking the box” or of failing…
May 21, 2018
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May 21, 2018
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The New York Business And Changing Domicile – “Let it Go, Let it Go”
“Leaving” the Business There is a common theme that runs through the history of most closely held businesses. It begins…
May 14, 2018
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May 14, 2018
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Personal Liability for Sales Tax In N.Y. LLCs
“Personal liability?!” the client screams. “For sales tax? How is that possible?” The look on their face is at…
May 07, 2018
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May 07, 2018
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You Can Lead Clients to Water, But You Can’t Make Them Drink
Will They Ever Learn? The following probably sounds familiar. You’re meeting with a new client who is being audited by…
April 30, 2018
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April 30, 2018
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Basis Consistency – Between Corporations and Shareholders?
Estates and Beneficiaries I recently encountered a situation in which the so-called “basis consistency” rule was implicated. This rule requires…
April 23, 2018
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April 23, 2018
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New York Reminds Us: “Sale of Intangible Property May be Taxable as Sale of Real Property”
New York’s legislature has been in the news lately after having “rotated an avian creature through more than 90 degrees”[1]…
April 16, 2018
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April 16, 2018
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Is it Debt or Equity? Is it a Dividend or Compensation? It Must be a Closely Held Business
I had a call a couple of weeks ago from the owner of a business. His brother, who owned half…
April 09, 2018
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April 09, 2018
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When Tax Truths Collide: “Disappearing” Basis?
How many times have you said to a client, “Please don’t agree to any deal terms until we’ve had a…
April 03, 2018
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April 03, 2018
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Have Your Business Do Onto You As You Would Have Your Business Do Onto Others (*)
Relationships are Hard The well-being of a closely held business is based, in no small part, upon a number of…
March 26, 2018
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March 26, 2018
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The Closely Held Business & the Minority Owner: Accessing Information from the Entity’s Tax Return?
Why a Minority Owner? I have often asked the question, “Why would someone willingly become a minority owner in a…
March 19, 2018
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March 19, 2018
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The Active Business Owner And Passive Real Property
Why Real Property? It is not unusual for the owners of a closely held business to also own a number…
March 12, 2018
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March 12, 2018
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Trusts and the Corporate Lawyer
Corporate attorneys usually think of trusts as estate planning tools: they are the vehicles through which the owner of a…
March 05, 2018
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March 05, 2018
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Capital Gain or Ordinary Income? Establishing Intent
Last week’s post considered the risk assumed by a taxpayer that ignores the plain meaning of a Code provision (the…
February 26, 2018
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February 26, 2018
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“Interpreting” the Code’s Plain Text
What Does It Mean? The Tax Cuts and Jobs Act[1] has now been in effect for fifty days. During this…
February 20, 2018
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February 20, 2018
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When is a Shareholder’s “Loan” to An S corporation Really a Loan?
Passing Through Losses There is a problem that will sometimes plague the shareholders of an S corp that is going…
February 12, 2018
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February 12, 2018
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Permanent Place of Abode, Proximity to One’s Business, and N.Y. Residence
“Life” Goes On Over the last month or so, most of the nation’s tax practitioners have been devoting an extraordinary…
February 05, 2018
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February 05, 2018
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U.S. Taxation of Foreign Income After Tax Reform
We’ve all heard about the profits that publicly-held U.S. corporations have generated overseas, and how those profits have, until now,…
January 30, 2018
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January 30, 2018
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Will Tax “Reform” Affect Domestic M&A?
Perhaps the single most important day in the life of any closely held business is the day on which it…
January 22, 2018
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January 22, 2018
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The Real Property Business and the Tax Cuts & Jobs Act
Introduction The Tax Cuts and Jobs Act of 2017[1] went into effect only two weeks ago. Many of its provisions…
January 16, 2018
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January 16, 2018
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The Federal Estate Tax Lives On, But “Where, O death, is your sting?” (*)
When the Tax Cuts and Jobs Act[1] was introduced on November 2, 2017, perhaps the single most important issue on…
January 10, 2018
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January 10, 2018
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Some of the TC & JA’s Corporate Tax Changes
Our last three posts focused on those provisions of the Tax Cuts and Jobs Act[1] that apply specifically to pass-through…
January 09, 2018
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January 09, 2018
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The 2017 Tax Act: Other “Pass-Through” Tax Provisions – Part II
Yesterday’s post examined various changes to the taxation of S corporations, partnerships, and their owners. Today, we will focus on…
January 04, 2018
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January 04, 2018
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The 2017 Tax Act: Other “Pass-Through” Tax Provisions – Part I
Our last post reviewed the “20% deduction” that may now be available to the owners of certain pass-through entities based…
January 03, 2018
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January 03, 2018
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The New Deduction for “Qualified Business Income”: Tax Simplification Gone Awry?*
In the weeks preceding the introduction of the bill that was just enacted as the Tax Cuts and Jobs Act…
December 27, 2017
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December 27, 2017
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Revoking S Corp. Status: A Fraudulent Conveyance?
Worlds Collide? I like to tell my partners that there are Codes (upper case “C”), and there are codes (lower…
December 18, 2017
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December 18, 2017
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Trust Fund Tax: Responsible = Liable (?)
Some shareholders are content with being wholly passive investors in a corporation. Others desire some degree of participation in the…
December 11, 2017
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December 11, 2017
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Information Reporting for the Foreign-Owned Not-So-Disregarded Disregarded Entity
Ah, December As we near the end of the taxable year ending December 31, 2017, the thoughts of most people…
December 04, 2017
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December 04, 2017
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Minority Owner Or No Owner at All?
Old Dog, New Tricks? It’s a concern for every new investor in a closely held business: will the founding owners…
November 27, 2017
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November 27, 2017
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S Corp. Shareholder to Tax Court: “Here’s Why I Deserve These Loss Deductions”
A post earlier this year considered the basis-limitation that restricts the ability of S corporation shareholders to deduct their pro…
November 20, 2017
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November 20, 2017
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LLC-to-Partnership Conversion: There’s More to it Than Meets the Eye
Some Days Are Stones[1] It’s not always easy to find a topic about which to write a weekly blog post.…
November 13, 2017
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November 13, 2017
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Rental Income or Self-Employment Income?
Skirting Employment Tax? The Code imposes the self-employment tax on the net earnings from self-employment derived by an individual during…
November 06, 2017
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November 06, 2017
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The New Partnership Audit & Collection Regime: Its Time Has Come
Beginning 2018, the IRS is authorized to collect from a partnership any tax deficiencies arising out of the partnership’s operations…
October 30, 2017
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October 30, 2017
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Determining the Appropriate Fee For Services Rendered to a Related Company
This week, we return to two recurring themes of this blog: (I) related party transactions – specifically, transactions between a…
October 23, 2017
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October 23, 2017
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Checking the Box, Partnership Allocations, and Foreign Law
Many of our clients, most of which are closely-held U.S. businesses, are looking to expand their operations overseas. Some are…
October 16, 2017
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October 16, 2017
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“Constructive Gifts” & The Partnership Allocation Rules
Relief? Not So Fast You may recall that the President directed the Treasury Department to identify “significant tax regulations” issued…
October 09, 2017
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October 09, 2017
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Thou Shalt Not Hold Real Property In a Corporation
“When will they ever learn?” No, I am not channeling Seeger. I am referring to those individuals[i] who continue to…
October 02, 2017
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October 02, 2017
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Debt vs. Equity: Form & Substance Matter
Some lessons need to be repeated until learned. It’s a basic rule of life. Don’t tug on Superman’s cape; don’t…
September 25, 2017
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September 25, 2017
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Liquidating a Partnership Interest? Beware the Effects of Partnership Indebtedness
Setting the Stage Over the last couple of months, I’ve encountered several situations involving the liquidation of a partner’s interest…
September 18, 2017
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September 18, 2017
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Withdrawing Your Business from New York? Did You Pay the Exit Tax?
Departing Individuals Many of you may know that an individual who changes his status from New York (“NY”) resident to…
September 11, 2017
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September 11, 2017
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Relief for Late Partnership Filings
Oops? Are you a member of a partnership or of a limited liability company that is treated as a partnership…
September 05, 2017
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September 05, 2017
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“S” Corporation Status, For an LLC?
Choice of Entity One of the first decisions – and certainly among the most important – that the owner of…
August 28, 2017
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August 28, 2017
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Taxpayers Bear the Tax Consequences of Business Decisions
Form v. Substance It is a basic precept of the tax law that the substance of a transaction, rather than…
August 21, 2017
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August 21, 2017
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When a Partner May Not Be Acting As a Partner
It is not uncommon for a partner to engage in a business transaction with a partnership of which he is…
August 14, 2017
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August 14, 2017
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Controlled Foreign Corporation: Neither a Lender, Guarantor, nor Pledgor Be?
Last week, we considered the U.S. taxation of a closely held foreign corporation that owned a minority interest in a…
August 07, 2017
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August 07, 2017
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Foreigner’s Sale of Partnership Interest: Not Taxable
Coming to America Whether they are acquiring an interest in U.S. real property or in a U.S. operating company, foreigners…
July 31, 2017
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July 31, 2017
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Reorganization of Insolvent Corporations: Has A New Day Dawned? Nope
Withdrawal of Proposed Regulations Earlier this year, the President directed the Secretary of the Treasury to review all “significant tax…
July 24, 2017
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July 24, 2017
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Employee Loan or Compensation?
A Borrower and a Lender Be Everyone recognizes the importance of debt financing to a business. The business needs liquidity…
July 17, 2017
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July 17, 2017
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Sale of A Contract: Capital Gain or Ordinary Income?
Maximize Capital Gain In the sale of a business, it is the goal of every business owner and his tax…
July 10, 2017
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July 10, 2017
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“Abandonment of a Partnership Interest,” or “When a Taxpayer Rejects Its Tax Return Position”
“Disposing” of a Partnership Interest If the amount realized by a taxpayer upon the sale of a partnership interest to…
July 05, 2017
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July 05, 2017
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Deducting Payments Between Related Parties
Potential for Abuse Many years ago, Congress decided that taxpayers who were “related” to one another should be required to…
June 26, 2017
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June 26, 2017
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Unreasonable Compensation & The Family Business
“Add-Backs” In the course of valuing a target business, a potential buyer will want to develop an accurate picture of…
June 19, 2017
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June 19, 2017
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Self-Employment Tax, LLCs, & The “Limited Partner” Exclusion
Introduction In general, self-employed individuals are subject to employment taxes on their net earnings. The wages paid to individuals who…
June 12, 2017
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June 12, 2017
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Contributing Encumbered Assets: Partnership Disguised Sale Rules
Many of our posts this year have considered some of the unique issues that are presented by a partner’s contribution…
June 05, 2017
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June 05, 2017
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Restricted Stock & Employee-Shareholders
Close Corporations and Compensatory Grants of Equity It should come as no surprise to readers of this blog that I…
May 30, 2017
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May 30, 2017
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Guidance for North-South Spinoffs
The IRS continues to issue guidance in the much debated area of corporate spinoffs. A recently published ruling examined the…
May 22, 2017
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May 22, 2017
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Why Care About Business Valuation? Part II
Missed Part I? Check it out here! “Related Party” Transactions Transfer Pricing Valuations figure prominently in determining the proper tax…
May 16, 2017
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May 16, 2017
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Why Care About Business Valuation? Part I
One word: “taxes.” There are so many transactions in which the tax consequences visited upon a closely-held business and its…
May 15, 2017
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May 15, 2017
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Paying The Estate Tax
An Unreasonable Burden? One of the reasons often given in support of the elimination of the estate tax is the…
May 08, 2017
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May 08, 2017
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S-Corps, Basis & Loss Limitations
In General It is a basic principle of federal tax law that a taxpayer cannot, for purposes of determining the…
May 01, 2017
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May 01, 2017
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Beyond Purchase Price: The Tax Treatment of M&A Deal Costs
Recovering Transaction Costs It is a basic tax principle that the more a seller pays in taxes on the sale…
April 24, 2017
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April 24, 2017
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Foreign Investment in U.S. Real Property: Gift And Estate Tax Considerations
Last week, we reviewed the various U.S. federal income tax consequences that may be visited upon a foreign person who…
April 17, 2017
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April 17, 2017
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Tax Considerations For The Closely-Held Foreign Investor In U.S. Real Property – Part II
Catching up? Start with Part I here. Sale of USRP – FIRPTA Aside from planning for the taxation of U.S.-sourced…
April 11, 2017
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April 11, 2017
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Tax Considerations For The Closely-Held Foreign Investor In U.S. Real Property – Part I
Over the last few years, we have received an ever-increasing number of inquiries from “foreigners” who are interested in acquiring…
April 10, 2017
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April 10, 2017
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Private Foundations: A Primer for the Business Owner
The Charitably-Inclined Business Many successful business owners attribute some part of their financial success to their community. The term “community”…
April 03, 2017
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April 03, 2017
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An Overview Of The NYC Business Tax Environment
NYC Never Sleeps – But It Does Tax “If I can make it there, I’ll make it anywhere.” So begins…
March 27, 2017
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March 27, 2017
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A Buyer’s Guide to Acquiring Target’s Assets With A Stepped-Up Basis
Oops The last few posts have focused upon the “tax-free” contribution of property to a partnership. Today, we’re “doing a…
March 20, 2017
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March 20, 2017
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Effecting Exchanges of Property Through a Partnership
A Continuing Investment In the last two posts, we saw how a Taxpayer who transfers Property A to a partnership…
March 13, 2017
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March 13, 2017
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Protecting Tax Deferral for A Contribution to A Partnership
Contributing Property to A Partnership When a taxpayer (“Taxpayer”) sells a property (“Property”) with a fair market value (“FMV”) in excess of Taxpayer’s…
March 06, 2017
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March 06, 2017
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When A “Tax Free” Exchange May Not Be Free of Tax
“Tax free” – two words that often bring great delight when they are spoken by a tax adviser to the…
February 27, 2017
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February 27, 2017
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N.Y.’s 2018 Budget Proposal: Tax Proposals To Watch
Last month, Governor Cuomo presented his budget proposal for NY State’s 2017- 2018 fiscal year. Included in the proposal were…
February 21, 2017
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February 21, 2017
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Reporting A Closely Held U.S. Corporation’s Overseas Activities
Looking Overseas We have heard a lot about large, publicly-traded U.S. corporations that have parked trillions of dollars overseas to avoid…
February 13, 2017
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February 13, 2017
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Shareholder Liability For Corporate Income Tax?
Limited Liability In general, the creditors of a corporation cannot recover the corporation’s debts from its shareholders—the shareholders enjoy the…
February 06, 2017
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February 06, 2017
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Rolling Over Target Equity Into A PE Fund: Part II
Roll-Over: Tax Issue Picking up on yesterday’s discussion, how can a PEF reconcile its preference to acquire a depreciable or…
January 31, 2017
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January 31, 2017
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Rolling Over Target Equity Into A PE Fund: Part I
For many business owners, the final step of a successful career may be the sale of their business. At that…
January 30, 2017
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January 30, 2017
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Loans Between Related Entities
What Was Intended? Over the last thirty years, I have reviewed the income tax returns of many closely held corporations…
January 16, 2017
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January 16, 2017
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When Investing In A Partnership May Be A Tax Problem
Double Taxation A business entity that is treated as a “flow-through” for income tax purposes enjoys the benefit of a…
January 09, 2017
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January 09, 2017
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Who Is The Taxpayer?
Back to Basics This is not a silly question. In fact, it is often one of the most difficult issues…
January 03, 2017
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January 03, 2017
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