The recent decision of the U.S. Supreme Court in Connelly v. United States, U.S., No. 23-146, 6/6/24, has thrown an enormous monkey wrench into traditional buy-sell planning for closely held businesses. The Court held that the proceeds of life insurance on a deceased shareholder must be included in determining the…
The Corporate Transparency Act (CTA) is a new law that requires certain businesses to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). A beneficial owner is someone who owns at least 25% of the business or has substantial control over it, such as a Manager, President, CEO,…
The IRS issued Rev. Proc. 2022-19, which provides simplified procedures for S corporations and their shareholders to resolve six frequently-encountered issues. For these issues, Rev. Proc. 2022-19 allows S corporations and their shareholders to obtain relief without requesting a private letter ruling (PLR). The IRS identified these issues as not…
When a business owner receives a letter of intent from a buyer to purchase their business, the business owner may be surprised to learn that the transaction is contingent on the underlying business entity engaging in an “F” reorganization. The business owner may be curious as to why a potential…
A formal definition of a “close” corporation reads a “corporation [that] does not exceed a statutorily defined number of shareholders and is not a public corporation… The main benefit of a close corporation is that it will be exempt from a number of the formal rules which usually govern corporations.”…
