So, we’ve had our ups, and we’ve had our downs. Hopefully by now, you can gauge the commitment that is made when establishing a business entity, and how breaking up that commitment–regardless of the context–is seldom clear-cut, and often frustrating. I have written about exit strategies and the consequent problems when facing taxes on assets. I have… Continue Reading
Category Archives: Income Tax
Subscribe to Income Tax RSS FeedBreaking Up is So Hard to Do (Part 2 of 3)
Posted in Business Tax, Income Tax, LiquidationThe Drama Continues…Queue the Red Tape! The first blog installment discussed the difficulties in establishing an exit strategy for a business entity, and a few problems that occur when transferring interests from an entity to a specific partner. The general rule is that gain is not recognized when property is distributed to a partner by a… Continue Reading
Breaking Up is So Hard to Do (Part 1 of 3)
Posted in Business Tax, Income Tax, LiquidationForrest Gump was a wise man for coining the phrase “Stuff Happens” (according to the G-Rated version of the movie). People–whether investors or business owners–often have different aspirations that many times do not necessarily coincide with the project they were undertaking. A simple case is when one owner/investor is more anxious to move on with the… Continue Reading
Understanding The Rules of Your Business Entity
Posted in Business Tax, Income Tax, TaxesEstate of Lifjestrand T.C. Memo 2011-259 (November 14, 2011): IRS wins another case where “bad facts” all but guaranteed a taxpayer defeat. The taxpayer failed to properly implement the basic steps that would support the validity of the partnership. Taxpayer’s revocable living trust owned sizable investments in commercial real estate. A limited partnership was formed… Continue Reading
IRS States That Civil Unions Should Be Treated As Husband and Wife For Income Tax Purposes
Posted in Income Tax, TaxesIn a recent letter to H&R Block, the IRS informed a senior tax adviser that opposite-sex parties to an Illinois civil union should be treated as husband and wife for federal income tax purposes if they are treated as husband and wife by Illinois, adding that under those circumstances, the parties may file their federal… Continue Reading
New York Residency Rule, Part One
Posted in Income TaxI received an interesting discussion of New York’s Statutory Residence Rule in the Tax Analysts Special Report dated April 4, 2011. The article written by Peter L. Faber criticizes the statutory residence test and argues that it should be repealed. In his article, the author points out that New York State taxes residents on all… Continue Reading