Partnerships and LLCs

Article Abstract:

The IRS ruled in PLR 9625013 that limited liability company (LLC) members did not possess any incidents of ownership in life insurance purchased to fund a trust established under the buy-sell agreement that the LLC members agreed to. The IRS classified the LLC as a partnership for tax purposes. Because the split-dollar life insurance arrangement was being transferred among partners, the transfer was not considered a transfer for value. Because none of the partners held incidents of ownership, proceeds would not be includible for estate tax purposes.

Partnerships, Laws, regulations and rules, Limited liability companies, Partnership, Buy-sell agreements, Split-dollar life insurance, Split dollar life insurance

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Taxpayer Relief Act of 1997

Article Abstract:

Individuals should consult with their financial advisors and estate planners before the end of 1997 to adapt their financial strategies and estate plans to the changes in the Taxpayer Relief Act of 1997. Many of those changes affect individuals including changes in the areas of capital gains, sale of a principle residence, gift and estate tax exemption, annual gift and generation-skipping tax exemption, family business interests, and excise tax on retirement plans.

Personal Tax Planning, Analysis, Personal finance, Tax planning

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Valuing compensatory stock options

Article Abstract:

The IRS in Revenue Procedure 98-34 has provided taxpayers with a method of valuing nonpublicly traded employee stock options for transfer tax purposes only. The options must be on stocks which are publically traded in recognized securities markets. The method uses accounting factors similar to those in accounting standard FAS no. 123 issued by the Financial Accounting Standards Board.

Tax Law, Public Finance Activities, Stock Options, Standards, Tax accounting, Options (Finance), Executive compensation, Valuation, Employee stock options

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