Articles

Volume 33 Number 3 Thursday, May 8, 2008

Knight v. Commissioner: The Two Percent Floor and a Fiduciary's Investment Advisory Fees

by Robert S. Balter, J.D., LL.M. (Taxation) and Jonathan G. Blattmachr, Esq.

The Small Business and Work Opportunity Tax Act of 2007 (the “Act”), which was contained in the Iraq Appropriations Act and was signed by the president May 25, 2007, made substantial changes in the standards applicable under §6694(a). 1

More >>

Practical Succession Planning for the Family-Owned Business

by Julius H. Giarmarco, Esq. Giarmarco, Mullins and Horton, PC Troy, MI and Sebastian V. Grassi, Jr., Esq. Grassi & Toering, PLC Troy, MI1

One of the chief concerns facing family business owners is how to effect an orderly and affordable succession of the of the business while ensuring that the business will provide for the future needs of the owner and his/her spouse and keep them comfortable during their retirement years. Failure to properly plan for a smooth succession during the owner's lifetime can result in monetary losses and even loss of the business itself. It is estimated that more than 70% of family-owned businesses do not survive the transition from founder to second generation. However, given adequate time and proper planning, a business succession plan can be implemented easily and often profitably.

More >>

Leading Practitioner Commentary

Limited Liability Companies as Exempt Organizations

The use of limited liability companies and exempt organizations has exploded over recent years. The combination of the two types of entities raises tax issues that deserves close attention. In particular, limited liability companies raise three issues in the exempt organization context. First, can a limited liability company be disregarded if it is owned by an exempt organization? Second, can a limited liability company be an exempt organization? Third, do contributions to disregarded limited liability companies wholly owned by exempt organizations qualify for the §170 charitable contribution deduction? IRS attorneys have addressed each of these issues,1 and the IRS has published a reference guide sheet in the Internal Revenue Manual to help process requests for information and exemption applications.2 These limited materials provide informal guidance about the position of the IRS regarding limited liability companies as exempt organizations.

More >>

Release of Form 990 Draft Instructions

On April 7, 2008, the IRS posted draft instructions for the redesigned Form 990 released on December 20, 2007 on its website (www.irs.gov). The comment period for the draft instructions is open until June 1, 2008. The draft instructions include highlight sections, which indicate certain items on which the IRS would particularly like to receive public comments. The IRS anticipates releasing the final instructions by the end of 2008 as organizations will begin using the redesigned Form 990 for the 2008 tax year.

More >>