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America’s Top 25 Accounting Firms
by Inside Public Accounting
FLP red flags
The IRS looks at all the facts and circumstances in determining whether
a family limited partnership (FLP) is legitimate, but there are several
situations that may catch its attention, including those where:
- The transferor is in poor
health,
- The transferor contributes
substantially all of his or her assets to the FLP, including homes or
other personal assets, without retaining sufficient funds to pay for
living expenses,
- The FLP makes
disproportionate distributions to the transferor or his or her estate to
pay living expenses or estate taxes,
- The parties fail to follow
partnership formalities, such as transferring legal title to all
property to the FLP and keeping proper books and records,
- There’s little or no
change in investment or business strategies after assets are transferred
to the FLP,
- The parties commingle
partnership and personal assets, and
- Younger family members
aren’t actively involved in FLP matters and don’t understand the plan or
receive advice from independent counsel or valuation experts.
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Tax Tips News
items briefly discussed are the IRS’s random audit program,
lodging expenses, out-of-state purchases, and what to do
when the IRS or a state taxing authority informs a taxpayer
of a discrepancy or mistake in a tax return.
Read more
5 post-year-end tax
strategies to reduce your 2007 tax bill
Now that you’ve “closed the
books” on the 2007 tax year, you may think you’re finished
tax planning for it. But there’s still time for you to
implement these five post-year-end strategies that can
reduce your 2007 tax bill. This article suggests making an
IRA contribution, checking receipts, simplifying your
retirement plan, reviewing losses and taking the expensing
election.
Read more
Bulletproofing your FLP
During the last decade,
family limited partnerships (FLPs) have come under fire from
the IRS. That doesn’t mean an FLP has lost any of its muscle
as an estate- and succession-planning tool. What it does
mean is that the IRS may attempt to shoot down an FLP it
believes is nothing more than a tax-avoidance scheme. This
article explores how to create an FLP that’s bulletproof —
or at least bullet resistant.
Read more
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Seal your exit strategy
with an ESOP If
you own a successful business, chances are a substantial
portion of your net worth is tied up in it. Even if you
plan to stay actively involved in the company for many
years, it’s important to have an exit strategy that
addresses when to convert your business interest into
cash so you can use it to diversify your investments.
Designing an exit strategy that meets your objectives
can be challenging, especially if your business is
closely held or the company’s stock is thinly traded.
How do you cash out without selling the business to an
outsider or giving up control? This article advises
business owners to consider an Employee Stock Ownership
Plan (ESOP), which creates a market for your stock and
offers extraordinary tax savings and other benefits to
your company and its owners and employees.
Read more |
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