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Tag Archive for Brett Thompson

Reduce Risk By Segregating Assets In A New Entity

The Problem: Often business owners want to segregate valuable assets from potential adverse liabilities generated in the operation of a business.

For example, a bakery will likely own: (1) equipment used in its operations; (2) the factory building and (3) a fleet of delivery trucks and vehicles. If all of these are owned by the same company, then liabilities arising from an accident involving the trucks could result in the loss of the factory building to satisfy a judgment. Read more

The SCIN-GRAT Technique- Especially Appropriate For Older Grantors

This SCIN-GRAT uses two well-known and documented techniques used to co-ordinate family gifting and tax efficiency.

The first is known as a Self-Cancelling Installment Note, or “SCIN” for reference. It is an installment note with a provision stating that if the Seller dies before the end of the note, then the note is deemed paid in full and the buyer need no longer make payments.  The buyer pays a premium for this feature, a result of a “bargained for consideration” negotiation. Read more

New Legal Entity; The “Series” LLC

Some states have created a novel and extraordinarily flexible type of entity called a “Series LLC”. Seven other states currently have this entity namely, Delaware, Illinois, Iowa, Nevada, Oklahoma, Tennessee and Utah.

Briefly, a series LLC is an LLC whose company agreement establishes one or more LLC substructures called a “Series,” each of which has a statutory “internal liability shield” that protects it from claims against other series and from claims against the LLC itself.  Read more

IRS Says It Can’t Satisfy Member’s Tax Liability Out Of Single Member LLC Assets

I. Single Member LLC Asset Protection

A Debtor argued that the Bankruptcy Trustee acts merely for her creditors and is only entitled to a charging order against distributions made on account of her LLC member interest. However, the charging order exists to protect other members of an LLC from having involuntarily to share governance responsibilities with someone they did not choose, or from having to accept a creditor of another member as a co-manager. Read more

Real Estate And The Net Investment Income Tax And Self-Employment Tax.

If you are planning or are actually doing a real estate business, either as an investor or as an active participant, you will have to deal with the these:

Net Investment Income Tax: If you have net investment income and your modified adjusted gross income exceeds $250,000 for married persons filing jointly, then there is a 3.8% tax on the lesser of (1) your net investment income, or (2) the amount your modified adjusted gross exceeds the threshold amount.  Note that self-employment income is not net investment income. Read more

Family Business: Partnership Mergers

In any successful family business there will likely come a time when descendants will want to take over the business from the older generation of owners. Usually, this will require that entities will need to be split into different business entities to accommodate both differences between the descendants (perhaps the descendants can’t cooperate with each other) or managing risk, so that high risk business can be separated from lower risk businesses and investments (construction business needs to be separated from investment assets such as stocks, bonds, annuity assets.) Read more

Corporate Separations Under §355.

In any successful family business there will likely come a time when descendants will want to take over the business from the older generation of owners. Usually, this will require that entities will need to be split into different business entities to accommodate both differences between the descendants (perhaps the descendants can’t cooperate with each other) or managing risk, so that high risk business can be separated from lower risk businesses and investments (construction business needs to be separated from investment assets such as stocks, bonds, annuity assets).

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Tax Expert Series- Learn Why Small Business Owners Have No Money After Paying Taxes

Kat Jennings, Brett Thompson

This interview with Tax Lawyer and CPA Brett Thompson is part of our Tax Expert Series. We encourage you to interact with these experts at TaxConnections AskTaxQuestion.com. You are also encouraged to make comments below this post.

Kat: What is the number one problem faced by small business owners and/or taxpayers today?

Brett: Actually, you could ask what the number one problem is faced by all Americans today. Read more

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