While flow-through taxation still is generally the way to go for the closely held business, it is not uncommon for a partnership to incorporate with a view of engaging in an exit transaction after five years via a stock sale that qualifies for the 100% exclusion of gain provided by §1202. Here is a nuance of this Code that came up in our practice.
A follow-up regarding PLR 202114002 (the favorable §1202 ruling involving an insurance agent/broker), courtesy of Eide Bailly.
PLR 202114002 is a taxpayer-liberal PLR, which provides that a business referred to as an “insurance agent or broker” was a qualified trade or business for §1202 purposes.
How is an S corporation’s accumulated adjustment account (“AAA”) impacted by forgiven PPP loan proceeds? The answer is not as easy as it first may seem.
When using life insurance to fund the redemption of the stock of a deceased shareholder in a closely held corporation, structuring the ownership of the insurance is critical and, very often, using an “insurance partnership” can be advantageous.
Chuck and Michael opine on Warne v. Commissioner, TC Memo 2021-17, a case that addressed, among other issues, an estate tax charitable deduction.