A new split-dollar life insurance case, Cahill, may expand the reach of Code §§ 2036, 2038, and 2703. A new case, Mazzei, re-cast statutorily-approved sales using a corporation as a dividend, followed by an excess Roth IRA contribution. Finally, an investment partnership receiving contributions and making distributions may run into several tax traps.
We will discuss:
- How businesses and individuals use split-dollar arrangements to finance life insurance, the income and gift tax effects of using split-dollar arrangements, the regulations' failure to require consistent reporting for estate tax purposes, how these rules apply when different generations are involved, how the taxpayer reporting a value of 2% of the amount of the split-dollar receivable led the Tax Court to reject the taxpayer's motion for summary judgment on IRC §§ 2036, 2038, and 2703, and planning in light of Morrissette and Cahill.
- The ongoing saga of taxpayers investing their Roth IRAs in private businesses, how the Tax Court's reviewed opinion in Mazzei re-cast statutorily-approved sales using a corporation as a dividend, followed by an excess Roth IRA contribution, and some juicy language the IRS may try to use in other contexts against taxpayers with thinly-capitalized business entities.
- How investment partnerships may generated unexpected tax results, why not to follow the letter of the regulations governing accounting for partnership investments, and dangers posed by frequent contributions and distributions, including some that proponents of investment partnerships fail to emphasize.
About the Speaker
Steve is a nationally recognized practitioner in the areas of estate planning and the structuring of privately held businesses. Lawyers, accountants and business owners regularly look to Steve for fresh, highly knowledgeable insights into the best possible tax and estate planning approaches to their transactions.
Steve crafts estate plans for individuals, keeping in mind their financial security and desire to save income and estate tax. In his work for businesses, Steve helps owners plan for the eventual sale (to co-owners, employees, or third parties)or transfer (to family members), and provides a legal framework for an orderly transition while strategically saving income, transfer, and FICA taxes.
Drawing on his background as an accountant - and his still-current CPA license and Chartered Global Management Accountant credential - Steve structures businesses to achieve business objectives and save income or estate tax. He has helped fledgling businesses organize, thriving businesses restructure to save hundreds of thousands of dollars of income tax when planning a transition to the next ownership group, and mature multi-million or billion-dollar businesses plan tax-saving transfers to the next generation.
Steve is a highly visible member of the ABA's Real Property, Trust & Estate Law Section and the American College of Trust & Estate Counsel, which regularly directs its members to Steve's quarterly newsletter. He has represented both groups in comments to the IRS, the U.S. Treasury, and tax lawmakers.
Click here to read Steve's full biography. Click here to view free resources Steve offers, including over 1,700 pages of technical materials on structuring closely-held businesses.