Drawn from Steve Gorin’s 4th quarter 2021 newsletter, this course discusses certain recent IRS developments in tax practice, a recent case on using life insurance to fund buy-sell agreements, and recent cases on loan guarantees. IRS developments include guidance extending electronic signatures (including what is permitted), describing the effect of superseding returns, and reliance on FAQs the IRS posts. We will also briefly mention advocacy relating to incorrect IRS penalty notices.
Then we will turn to planning in light of a September case increasing the value of a business interest due to life insurance the company received on the insured’s death that the company was required to use to buy the business interest. First, we will review various income tax issues relating to using life insurance. Next, we will discuss the choice between a purchase by the business entity (a redemption) and a purchase by the remaining shareholders (a cross-purchase). We will then discuss the estate tax effect of buy-sell agreements on valuing the decedent’s business interest and describe the risks that redemptions have, describing the leading cases on that topic. We will conclude that topic by using a life insurance LLC to fund a cross-purchase.
Finally, we will discuss using loan guarantees to provide substance to loans to borrowers that have a modest net worth. We will review the consequences of loan guarantees and some recent income tax developments that generally inform guarantees and loans, with a very brief reference to new regulations regarding the switch from LIBOR.
Steve has drafted trusts and a full range of estate planning documents for clients to help grow, preserve, and transmit their family wealth. He has also prepared organizational documents for limited liability companies, corporations, and partnerships to implement their owners' wishes regarding current and future control and transmission, including bringing in new owners and facilitating exit strategies.
Steve enjoys helping clients structure their affairs to achieve their personal, business, and financial goals while reducing the drag that taxes imposed on them. His firm provides full service to businesses; however, he also acts as counsel on specialized matters while cooperating and facilitating the continued involvement of an existing legal, accounting, and financial services team. Steve maintains his CPA license but prefers to refer income tax returns to practicing CPAs.
Steve Gorin is the former president and an ongoing contributor to Covenant Place’s strategic initiatives. It is a senior affordable housing community with a groundbreaking model for integrated residents with the surrounding community and facilitating holistic services to enrich their lives.
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For various free resources Steve offers, see https://www.thompsoncoburn.com/insights/blogs/business-succession-solutions/about
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