Showing 1-8 of 10 Results
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Avoiding Tax When Splitting Up A Business Taxed As A Corporation Among Shareholders
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A distribution of property from a partnership to a partner in exchange for his or her partnership interest will generally be tax-free to the partnership and the partner, if the distribution does not exceed the partner’s basis in his or her partnership interest. This concept applies equally to state law partnerships and LLCs taxed as partnerships. Distributions from corporations have much more undesirable tax affects. A corporation distributing non-cash property to a shareholder in redemption of the shareholder’s stock, whether an S corporation or a C corporation, must recognize gain as if it has sold the property to the shareholder at its fair market value. In the case of an S corporation, the gain is then passed through to the shareholder. With a C corporation, the corporation will be taxed on any gain, and the shareholder will generally also have to recognize gain or loss based on the fair market value of the property received versus his or her stock basis. When the distribution of assets is made to a shareholder to spin-off part of the business, the corporate form can present tax inefficiencies for the redeemed shareholder wishing to continue the business post spin-off. This is relevant in any number of situations where shareholders wish to part ways with both the remaining shareholder(s) and the departing shareholder(s) wishing to continue in the corporation’s current business, or one of several of the corporation’s lines of business, using some of the corporation’s assets. Examples would include situations where: (i) spouses run two separate hardware stores owned by a single corporation and wish to divorce with each spouse thereafter continuing to run one of the stores through separate entities; (ii) where siblings run multiple restaurant locations through a single corporation and wish to split-up so that each can bring his or her kids into the business; or (iii) where a dental practice has operated as a corporation and the two shareholder/dentists are no longer compatible and wish to split up their practice.
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The Basics of Estate Planning
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A good estate plan will include planning for incapacity as well as for death. For clients that are still working, the chance of becoming disabled is significantly higher than the chance of dying. Accordingly it is just as important to make sure you have a Financial Power of Attorney and a Health Care Power of Attorney as it is to have a Will and/or Trust.
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Do You Really Need an Attorney When Purchasing a Home?
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For many buying a house, it is often the largest asset they will ever purchase. That alone is reason enough for a homebuyer to wish the purchase is done right. A common misconception among homebuyers is that a real estate agent can help them with every aspect of a transaction. While real estate agents play a valuable role in connecting a buyer with a seller and often go above and beyond to assist their clients, there are limits to what they can do. A key limitation is that real estate agents cannot offer their clients legal advice unless they are also licensed attorneys. If legal advice is needed, only a licensed attorney can provide it.
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11 Estate Planning Terms You Need to Know
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Estate planning—it is an incredibly important tool, not just for the uber-wealthy or those thinking about retirement. On the contrary, estate planning is something every adult should do. Estate planning can help you accomplish any number of goals, including appointing guardians for minor children, choosing healthcare agents to make decisions for you should you become ill, minimizing taxes so you can pass more wealth onto your family members, and stating how and to whom you would like to pass your estate on to when you pass away.
While it should be at the top of everyone’s to-do list, it can be an overwhelming topic to dive into. To help you get situated, below are some important terms you should know as you think about your own estate plan.
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Phantom Stock Plans As An Alternative To The Issuance Of Stock To Key Executives
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We often receive calls from business owners to discuss the possibility of issuing stock to a key employee to incentivize the employee to grow the business. We find that once the ins and outs of issuing minority stock to employees are explained, owners are often hesitant to offer actual stock ownership to employees outside their immediate family.
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Changes to Non-Compete and Stay or Pay Agreements Under the New Administration
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As a sign of things to come with the new administration taking office this year, in February 2024, the National Labor Relations Board’s Acting General Counsel, William B. Cowen, rescinded dozens of General Counsel Memorandums issued by his predecessor in the Biden Administration, Jennifer Abruzzo. (Note that GC Memos are nonbinding statements asserted by the NLRB General Counsel as guidance on how the NLRB should interpret the National Labor Relations Act.)
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Reviewing Your Estate Plan after the Death of a Loved One
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The death of a loved one is never easy. Regardless of your relationship with the deceased (for example, a relative, significant other, or close friend), you need space and time to process and grieve your loss. Once you have had time to cope with all that has happened, you should consider updating your estate plan in light of your loved one’s death.
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Probate: What it is, what it isn’t, and what it shouldn’t be
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This article explains the probate process, clarifying what it is, what it isn’t, and why it can sometimes be tedious or lengthy. It also highlights how working with an experienced attorney can help streamline the process, avoid common mistakes, and ensure that the decedent’s wishes are carried out efficiently.