The Patient Protection and Affordable Care Act (PPACA) and the American Taxpayer Relief Act of 2012 (ATRA) increased the Medicare tax on earned income and introduced a new tax on the net investment income (NII) of hi-income individuals. The 3.8% tax applies to the extent an individual’s compensation or self-employment income exceeds the specified threshold […]
Often business owners want to segregate the good assets from potential adverse liabilities. In the formation of a new business this can be easily plan for. The challenge is when there was no initial planning and the business is now successful. The problem is that separating the good from bad assets can have possible adverse […]
Buy sell provisions are very common in closely held businesses to control the transfer of shares of stock, partnership and or membership interests depending upon the business entity used by the owner(s). They typically are used to determine the value of the transferred interest based upon various types of formula clauses when a transfer occurs […]
One of the most important things that you should focus on when you meet with your accountant or CPA this tax season is to review which assets now and in the future will be the most important to both you and your family. Recently, I attended the USC Tax Institute and a nationally known speaker […]
The California Revised Uniform Limited Liability Company Act (RULLCA) is effective on January 1, 2014, RULLCA. It revises the rules for formation and operation of Limited Liability Companies (LLCs) in the state of California. Last month’s article gave a basic overview of some of the key changes. After attending various seminars on RULLCA and its […]
Starting in January 2013 because of the American Taxpayer Relief Act of 2012, owners of small businesses face a question regarding using a corporation as a business entity: Should the business elect to be an S corporation, or remain as a C corporation for tax purposes? Today there are higher tax rates than in 2012 […]
In 2014, the estate and gift tax is $5.34 million for an individual and $10.68 million for a couple. That does not mean for the closely held business, succession planning for the next generation and continuing the closely held business is still not very important. There are many non-tax reasons for such planning. The old […]
I have been updating a married couple’s estate planning documents, which include both community property and separate property trusts. The primary reason for this review was to make certain that all of the assets that can have a stepped up in basis on the death of the first spouse could also be stepped up again […]
Partnerships and limited liability companies are a very tax favorable business entity to conduct a family business or new enterprise. However, depending on the type of asset distributed, the partner who made the initial contribution and who is receiving the distributed asset can have some surprising results as discussed below. Also, family limited partnerships (FLPs) […]
The American Taxpayer Relief Act of 2012 (“ATRA”) has given us a permanent set of estate, gift, and GST tax rules for the first time in more than a decade. ATRA provides that a couple can transfer up to $10.5 million without having to worry about their estate paying any estate taxes on the death […]