Steve Gorin’s “Business Structuring Series” is a series of 7 content-packed webinars that are designed to get you quickly up to speed on the leading edge of business planning issues of the day.
Class #1: Choice of Entity after 2017 Tax Reform – Basics
2017 tax reform drastically lowered income tax rates for C corporations, encouraging business owners to switch to C corporation form. Before you step into that roach motel, consider whether the benefit are really there.
- See how the effective annual tax rates of C corporations (distributions all, half, or none of their annual earnings) to those of pass-through entities, such S corporations, partnerships, and sole proprietorships
- Learn how the reinvested earnings may be taxed in the long run, including pressures on declaring dividends
- Hear how converting to a C corporation can ruin a sale to an irrevocable grantor trust
- Review the dynamics of converting from an S corporation to a C corporation and back again
Class #2: Qualified Business Stock Compared to Other Exit Strategies
The IRC § 1202 exclusion for qualified small business stock helps one escape the C corporation roach motel.
- Discover the benefits of obtaining the IRC § 1202 exclusion for qualified small business stock
- Learn the requirements for obtaining the IRC § 1202 exclusion and how they may affect business structure
- Compare exits using this federal exclusion to exits using pass-through entities, including when the IRC § 1202 exclusion may increase one’s tax liability relative to that of pass-through entities
- See how a business might be structured to try to get the best of all worlds
Class #3: Transitioning Businesses to Key Employees (Including Children)
In “Qualified Business Stock Compared to Other Exit Strategies,” we discussed how the parties can use income shifts to avoid capital gain tax on the sale of a business. In this webinar, we discuss how to use deferred compensation to obtain similar benefits and how to migrate a corporation so that it can use a partnership solution to obtain most of these benefits.
- Learn how deferred compensation can facilitate a business sale and cautions to consider.
- See the two ways a corporation may move current or future business value to a partnership model without incurring tax on the transfer
- Review the standards courts use in scrutinizing such transfers
- Learn basics of using profits interests to incentivize future growth
Class #4: Basis Step-Up Strategies for Equipment and Real Estate
Although business interests receive a new basis when included in a decedent’s gross estate (“outside basis step-up”), property the business owns will not necessarily receive a corresponding benefit (“inside basis step-up”).
- Learn the concepts of “outside basis” and “inside basis” and how they differ, based on the structure used to hold business assets
- Find out how an S corporation can try to mimic a partnership’s inside basis step-up and when that strategy works or fails.
- See how to obtain 100% leverage on real estate so that it can get a free basis step-up while transferring high basis assets using leveraged estate planning tools.
Class #5: Tricks and Traps for Trusts Holding Pass-Through Entities
Passing S corporations and partnerships through trusts can create cash flow issues and tax traps. We will discuss issues affecting S corporation qualification and post-mortem trust funding, how the timing of tax distributions can disrupt blended families, avoiding the net investment income tax annually and on sale, issues involving multi-state residents, and other issues.
- The latest on 2017 changes to the tax law involving trusts and estates
- Protecting S corporations from defects in wholly-owned grantor trust status
- Post-mortem planning for trusts holding S corporation stock
- The dangers when those bequeathed the business interest are different from the owner’s or primary beneficiary’s residual beneficiaries
- Planning for 3.8% tax on net investment income
- Tax trap for mandatory income trusts
- Trap when trust or estate is in one state and the entity’s assets are in another state
- How to correct apparently blown opportunities to get a basis step-up in a partnership’s assets
Class #6: Planning for a Trust Selling an Interest in a Pass-Through Entity
When a trust sells an interest in a pass-through entity, one needs to consider whether to turn off grantor trust status, possible imposition of the 3.8% tax on net investment income, and nuances particular to S corporations.
- See how income is allocated when turning off grantor status
- Learn how the 3.8% tax on net investment income applies to such a sale and important steps to take if the grantor wants to turn off grantor trust status in a way that helps the trust avoid this tax
- How the sale of S corporation stock by a qualified subchapter S trust (QSST) is taxed to the trust and its beneficiary – especially any actual or deemed sale of depreciable property – and how to balance distributions against retaining sale proceeds
Class #7: Life Insurance in Buy-Sell Agreements
Life insurance is frequently used to fund buy-sell agreements. Agreements may involve a purchase by the entity (“redemption”), by the other owners (“cross-purchase”), or a combination (“hybrid”)
- Learn how the type of purchase arrangement affects basis, as well as various non-tax issues
- Discover how life insurance may become subject to income tax if you don’t avoid traps involving business-owned life insurance
- See how holding life insurance outside of the business entity can meet important tax and non-tax objectives
- Learn how policy transfers may eventually subject the death benefits to income taxation
- Review recent cases involving split-dollar arrangements
Registration Fee: $299
Speakers: Steve Gorin
CE Credits: There are no CE credits available for this program.
Note: Purchase includes unlimited viewing of the webinars and access to the slide decks.