Most business owners that I meet are surprised to learn that just because they operate their business as an incorporated entity (S-corp or C-corp) or an LLC, their business and personal assets are NOT “automatically” and “fully” protected from business or personal litigation. Ignorance is bliss, getting a hard reality check from the hungry litigators in an overpopulated legal system is a difficult lesson to learn. Take note – if you’re not prepared – the legal system can be brutal and unforgiving. We get too many phone calls from business owners who are facing litigation from an event that’s already…
Category: Tax
Tax Planning is a Critical Component of an Exit Plan
Consider This Typical Scenario: Business owner commits decades building a profitable and successful business. As you know, those years have been filled with personal and family sacrifice, long hours, sleepless nights, and countless employee issues. That effort has produced a profitable and growing business, a loyal and well trained group of employees, and a consistent customer base. Without realizing it, one of the other and perhaps most costly sacrifices that Business Owner made was NOT utilizing advanced tax planning to use the business as a tool for properly building Personal Wealth and Retirement Planning. It really wasn’t Business Owners fault;…
Life Insurance Can Play a Role In Both An Exit Plan and an Estate Plan
Most people have an aversion to life insurance salespeople, they can be aggressive and often unpleasant. But don’t let that negative sales culture prevent you from recognizing the role that life insurance can play in your estate and exit planning. But even if you have a fairly modest business and estate, life insurance can play an important role. Of course, life insurance can increase the size of your estate should you pass early. And for young families in need of a breadwinner, life insurance can provide invaluable financial protection in the event of premature death. In large estates (businesses) life…
Nothing New Under the Sun: Stealth Estate Tax Proposal Returns
A well-known proverb originally derived from the Bible is “There is nothing new under the sun”. Back in 2016 and 2018, I alerted clients as to attempts by the Obama administration to increase taxes by eliminating commonly two commonly used discounts in business valuation: Discount for Lack of Control (DLOC or Minority Interest Discount) and the Discount for Lack of Marketability (DLOM). Eliminating these discounts What made that attempt particularly noxious is that it was effectively a tax increase without congressional approval. Congress was not likely to approve such a change and the administration wanted to bypass it. Further, for…
The 2018 Tax Law Changes – The 20% Pass Through Deduction
The Tax Cuts and Jobs Act (TCJA) effective for Tax Years beginning 2018 includes a new code section 199A. A business that utilizes proactive, strategic tax planning should realize a windfall of additional tax savings in 2018 and future years, if and only if, YOU make these new tax laws work for you and your business! The new pass-through deduction is designed to benefit pass-through businesses including partnerships, S-Corporations, sole proprietorships, and LLCs that elect to be taxed as one of these three. Most of the calculations take place at the business level and are then passed on a pro-rata…
Beware the Stealth Tax
Following are two articles I posted on LinkedIn. They describe an attempt by the IRS to implement a “stealth tax” on business owners. Because business valuation techniques and processes can be somewhat obscure for most people, the impact of such a change could easily have passed unnoticed. Business valuation is both art and science and this is an example of how these two factors interact. We need to always be diligent about changes in public policy that are hidden in this way. There are real implications for real people. Posted on LinkedIn November 7, 2017: This is a follow-up to…