Tag Archives: Business Planning

Finseca (AALU) – “Houston, We Have a Problem – Valuations (Again)”

 The Washington Report: – Wealth Transfer Edition

“The IRS continues its attack on valuations, and there’s no end in sight.  The U.S. Tax Court recently issued its decision in Estate of Cecil v. Commissioner. The decision is important because it contributes to the discussion whether tax affecting is necessary and/or appropriate when valuing an S corporation. Additionally, the decision reveals the zeal with which the IRS is pursuing wealthy taxpayers on valuation matters and highlights the importance of deep expertise needed for successful business succession planning and using reliable appraisals. Taxpayers with successful family-owned businesses who desire to retain ownership of the business within the family are well advised to engage advisors well versed in business succession planning.  Reliable appraisals matter.”

To read the full report, click here.

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Finseca (AALU): Buy-Sell Agreements in Light of Connelly Part 1: The Fundamentals of Buy-Sell Agreements

The Washington Report: – Business Uses Edition

“At question was whether the life insurance proceeds received by a corporation and intended for redemption in the context of a stock-purchase agreement should be taken into account when determining the corporation’s value at the time of one of the stock-holder’s death.  Buy-sell arrangements (“BSAs”) address how the business or other business owners can “buy-out” an owner’s interests after a specified triggering event, such as death.  To be effective, the terms and structure of a BSA must be tailored to the unique needs of each business and business owner; there is no “one size fits all” form.  BSAs also should take a comprehensive approach to buy-outs, addressing not just an owner’s death, but also disability, divorce, and bankruptcy, among other events.  BSAs create a ready market for the purchase of a deceased or departing owner’s interests at a fair value, which makes them a key component of a business owner’s financial and legacy plan. To obtain optimum results, business owners should coordinate with their insurance advisors, attorneys, accountants, and other financial advisors from inception to ensure the BSA is properly customized to their business and appropriately funded.  Owners and their advisors also should conduct regular reviews of their BSAs and any funding sources, especially after any changes in the business’s ownership, tax status, or value.”

Click here to read the full report.

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