Nearly all business activities, estate plans and estate settlements have tax consequences, which are important enough to determine or at least influence the structural advice we give in many cases. We therefore make it a point to be sure that the tax consequences of the arrangements we recommend have been thoroughly considered.

At the same time, we rarely recommend doing anything for tax reasons which would not otherwise make business sense – put another way, we believe that tax factors should influence but not drive basic business and estate planning decisions.

Here is a sampling of the kinds of tax questions we address most frequently:

 

  • What form of trust will take the best advantage of available estate and generation-skipping transfer tax exemptions without unduly complicating the estate plan?
  • Are lifetime gifts and other strategies designed to minimize transfer taxes appropriate for the client’s estate? We counsel on family partnerships, irrevocable trusts, charitable remainder trusts and other tax-advantaged arrangements.
  • How should transfers of tax-deferred assets, such as IRAs and section 401(k) plans, be handled when the owner dies?
  • Should a business be conducted through a legal entity or be a proprietorship, and, if a legal entity is used (corporation, partnership, LLC), which one will have the best results for income, franchise, self-employment and property tax purposes?
  • In a startup business, what is the tax treatment of “service partners” who contribute services but not assets, and how can they be given equity shares without incurring immediate income taxes on the value of those shares?
  • If a business is to be sold, should the sale take the form of a merger or stock sale or should it be structured as a sale of assets? Asset sales may be safer for buyers but can result in substantial sales taxes on certain assets and income taxes resulting from depreciation recapture for sellers.
  • How should property be transferred to minimize reassessable “changes of ownership” that can result in major property tax increases? Many transactions can be legitimately framed in different ways, often with drastically different property tax results.
  • What is the best way to structure ownership of real property used in an incorporated business?
  • What is the best structure from a tax standpoint for real estate development projects?
  • For clients with charitable intentions, how should their gifts be structured to maximize income, estate and gift tax benefits? We recommend and structure many charitable gift arrangements including foundations, split-interest charitable trusts, bargain sales to charity and others as appropriate.
  • What business activities can an operating charity engage in without losing its tax exemption, and how can the benefit of other, non-permitted business activities be retained without putting the exemption at risk?


Other Tax Services
We normally prepare gift and estate tax returns where required in connection with our estate planning and administration services and handle audits of those returns as required.

We do not prepare income tax returns because these services are best obtained from accountants or other professional return preparers. However, we may perform pre-filing reviews and/or consult with tax preparers retained by our clients on the proper reporting of tax-sensitive transactions.

We normally do not undertake representation in field-level income tax audits or in tax collection cases, again because such matters are usually better handled by accountants or other tax professionals.

Interested in our tax planning services? Call us at (805) 781-3645 to set up a consultation.