Payments for Future Remediation Expenses Are Not Insurance Premiums
...Rul. 2007-47 that payments to an insurance company to cover future capped costs were not insurance payments for tax purposes. The "premium" was an amount equal to the present value of estimated f
Published on April 19, 2010
Computing the Includible Portion for Graduated GRATs
Recent regulations provide practitioners a reminder that planning discussions with clients considering graduated GRATs should include a review of the potential consequences presented if the grantor dies prematurely
Published on July 25, 2013
Golden Parachute Calculations 10 Misunderstood Aspects of Secs. 280G and 4999
When a company experiences a change in control, the golden parachute rules are intended to discourage excessive compensation for “disqualified individuals” by imposing adverse tax consequences on both the company and the disqualified individuals.
Published on July 23, 2013
Grantor-retained annuity trusts — commonly referred to as “GRATs” — have been in the cross-hairs of the Internal Revenue Service (IRS), Congress and the Obama Administration for some time. This is because of the increased use of short-term GRATs with zero-remainder interests, resulting in no gift tax upon the creation
Published on January 28, 2011
Now Is the Time Converting a C Corporation to an S Corporation or LLC
The current uncertain economic environment may present an opportunity to exit C status and its attendant double taxation at an acceptable current tax cost
Published on July 30, 2013
Determining the Correct FMV of Private Company Stock When Stock Options Are Granted
...stock option is granted to an employee, great care must be taken to ensure that the exercise price is equal to or greater than the stock's fair market value (FMV) on the option's grant date. If the exercise price is lower than the FMV, resulting in a "discounted
Published on January 28, 2011
Substantial Compliance Insufficient to Allow Charitable Deduction
The Seventh Circuit has held that the doctrine of substantial compliance would not allow a trust to take a charitable deduction where the trustee had intended, but failed, to reform the trust as a charitable remainder unitrust.
Published on May 10, 2010
IRS Issues Partnership Anti-Abuse Rule Regs.
The IRS and Treasury issued final regulations on June 8 to provide that the Sec. 704(c) anti-abuse rule takes into account the tax liabilities of both partners and certain owners of partners (T.D. 9485). The regulations also provide that partnerships cannot use an allocation method to achieve tax results that
Published on August 01, 2010
The Codified Economic-Substance Doctrine and Captive Insurance Companies
In light of the lack of guidance on whether the new codified economic-substance rules apply to captive insurance companies, it is prudent to assume that the law does apply.
Published on August 31, 2012
IRS Issues New Rules on Allocation of Partnership Items
Proposed regulations under Sec. 704(c) provide that the Sec. 704(c) anti-abuse rule takes into account the tax liabilities of both the partners in a partnership and certain direct and indirect owners of such partners.
Published on May 02, 2010