Archive for December, 2009
100% Deduction for Meals & Entertainment? It’s Possible.
Ordinarily, a company is allowed to deduct only 50% of its expenses for meals and entertainment. In some situations, meals and entertainment expenses are 100% deductible. Business-related expenses for meals and entertainment are 100% deductible when: the expenses are for recreational, social or similar activities that are mainly for the benefit of employees who are [...]
10 Things About Life Insurance Trusts
1. A Problem of Inclusiveness. The death benefits payable on life insurance that you own is included in calculating the value of your estate subject to Federal estate taxes. Even though you cannot spend the death benefits yourself, you control who will receive them, and that’s good enough for the IRS to tax them. 2. ILITs: Better [...]
New York Times’ Take on the Estate Tax
Yesterday’s editorial in the New York Times–“An Estate Tax Mess“–makes many of the same points as I tried to make in my post on December 24th. In particular, the editorial discusses the new hardship created by repeal of the step-up in basis on inherited property. It’s conclusion: “There will be many more losers than winners [...]
Death, Resurrection and Step-Up
It’s all but certain that Congress will fail to act by the end of the year to stave off the death (albeit briefly) of the Federal estate tax. Since 2001, we’ve been slowly plodding toward what most believed to be the easily avoidable 2010 hiatus and 2011 resurgence of the estate tax. Stated plainly, the [...]
10 Things About LLCs
1. Corporate Gymnastics. LLCs are a flexible form of business entity, because there are fewer mandatory rules that apply to LLCs than to corporations or partnerships. However, this flexibility means that all of the details governing each LLC must be spelled out in long, complicated Operating Agreements. 2. Limited Liability. Like corporations and (some) partnerships, LLCs offer [...]
10 Things About Probate Administration
1. What is Probate? Probate is the process for wrapping up the legal affairs of a decedent person. It involves confirming the decedent’s Last Will, collecting and managing his or her property, paying his or her just debts, and distributing the remaining property among his or her beneficiaries. Probate is administered by a local court where [...]
Are LLCs Protected from Member Bankruptcies?
The Florida Limited Liability Company Act, and similar statutes in other states, go a long way to ensure that the debts and liabilities of one member do not affect the the LLC and its other members. For instance, a judgment creditor of an LLC member is generally only entitled to a charging order (that is, [...]
Establishing Residency in Florida
Florida is a popular place to live not only for its beaches and warm weather, but also for its lack of state income tax and generous asset protection laws. Anyone can enjoy the beaches and weather, but it is important to establish residency in Florida to enjoy many legal benefits. Establishing legal residency in Florida [...]
10 Things About Stock Options
1. A Range of Options. Stock options are just one form of employee incentive, all of which are intended to encourage key employees to make the company successful. In evaluating the alternatives, there are two important questions: What will incentivize the employees? How much ownership should the employees have? 2. Don’t Believe the Tax-Free Hype. [...]
A Break for (Some) S Corporations
Corporations that elected S corporation status during the years 2000 through 2003 got a small break in the American Recovery and Reinvestment Act enacted this year. For these S corporations, the built-in gain recognition period was shortened from 10 years to 7 years. This means that now may be a good time to sell built-in [...]