All about that basis, about that basis, no gains

The Tax Cut and Jobs Act (“TCJA”) enacted some sweeping changes to our nation’s tax laws. One major change was the modification of Section 2010 to increase in the individual estate tax exemption from $5M, indexed for inflation ($5.49M in 2017), to $10M, indexed for inflation ($11.2M in 2018, 11.4M in 2019). Thus couples went…
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The Sale of a Business – Part 5: The Closing

One of the more common engagements for our firm is to assist with business sales and acquisitions. This article is the fifth in a series of articles which will walk through and generally discuss the steps typically associated with the sale of a business. In Part 1, we discussed the breakdown of the business, the…
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Equity as Compensation: The Ins and Outs of the Section 83(b) Election

A common form of compensation for  management and executive level employees is a grant of equity in the employer company, or the option to purchase such equity at a reduced price. Compensation in the form of equity can be a big incentive for employees to join a new company, particularly a startup, or stay at…
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Tax Court Allows Rollover Contribution Past Deadline

In a recent Memorandum opinion issued by the Tax Court, the Court held that the 60-day time limit for individual retirement account (“IRA”) rollovers was met for a distribution and subsequent recontribution of IRA funds despite the funds not being credited back to the IRA upon recontribution until 62 days after the initial distribution. The IRS…
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Recent Celebrity Estate Planning Blunders

This week, I have decided to take a break from our normal more technical writing and discuss some recent celebrity estate planning blunders that have come to light. Not only are these cases interesting and entertaining, but they also can provide valuable lessons when it comes to estate planning. In a previous article, I wrote…
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Tax Court Acknowledges Remote Material Participation

Can the material participation tests of Section 469 be met remotely? The Tax Court says yes. In a recent Memorandum Opinion, the Tax Court (the “Court”) held that Fred Barbara (“Barbara”) satisfied the requirements for materially participating in his Chicago based business despite living in Florida approximately 60% of the year. The Internal Revenue Service (the…
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When Your Captive Is Not In the Insurance Business

In a recent Tax Court Memorandum opinion, the Tax Court (the “Court”) held that a microcaptive insurance arrangement did not meet the requirements to be classified as insurance for federal income tax purposes, and thus upheld the Internal Revenue Service’s (the “IRS”) Notice of Deficiency (the “Notice”) against the company and its related taxpayers who…
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The Sale of a Business – Part 3: Due Diligence

One of the more common engagements for our firm is to assist with business sales and acquisitions. This article is the third in a series of articles which will walk through and generally discuss the steps typically associated with the sale of a business. In Part 1, we discussed the breakdown of the business, the…
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