Choice of Entity (expanded)

Overview

This comprehensive course describes and compares sole proprietorships, partnerships, limited liability companies, C corporations, and S corporations. It examines the advantages and disadvantages of each, helping you properly select the right business entity for your clients’ specific tax and liability needs. Perhaps most importantly, this course emphasizes the maximization of tax benefits in each business format. Fringe benefits, retirement plan alternatives, and nonqualified deferred compensation are also discussed in detail.

Highlights

• Tax Economics • Business Planning • Deferred Compensation Plans • Basic Fringe Benefits • Business Entertainment • Business Travel & Transportation • Insurance • Equity Participation • Estate Planning

Designed For

This program is appropriate for professionals at all organizational levels.

Objectives

• Identify financial and tax income types noting how cash management is used to acquire and operate assets, specify changes recently made to taxable income, determine how the passive loss rules categorize income and identify income splitting formats that can reduce tax. • Recognize compensation strategies citing employer vs. employee perspectives, identifying parties’ goals and objectives, and selecting compensation techniques to accomplish such goals. • Determine the meaning of “deferred compensation plan”, cite questions for assessing deferral usage, and recognize multiple deferred compensation types so clients may properly structure compensation. • Recognize basic fringe benefit planning by determining “income” under 61, and identify the differences between former nonstatutory and current statutory fringe benefits created by recent cases, rulings, and tax law changes. • Identify the key tax terms “entertainment,” “lavish” and “extravagant,” recognize the required tests to ensure that entertainment expenses can be deducted, determine the importance of the statutory exceptions and the treatment of ticket purchases noting the percentage reduction restriction for meals and entertainment and, specify the over arching 2% floor on miscellaneous itemized deductions and how it can reduce business entertainment deductions. • Identify business travel and transportation concepts by specifying the differences between transportation and “tax home” sensitive travel to maximize deductible expenses. • Recognize the business and tax importance of available business insurance including the broad spectrum of company paid insurance, 79 group term life, retired lives reserve, spit dollar, former death benefit plans, business travel, disability, medical, and dental specifying permitted coverage and tax treatment. • Recognize equity participation by specifying factors that determine the benefits of stock options, determine how to transfer an equity position, identify controlled sales, and cite programs to provide executives with an equity ownership interest in a business. • Identify estate planning for business clients noting elements of estate tax planning that have remained unchanged by recent legislation, recognize the unlimited marital deduction including its effect on the gross estate of the value of property, and specify the applicable exclusion amounts for various years of death. • Specify the elements 1031 noting how these elements conceptually differentiate a like-kind exchange from a sale. • Identify “boot” and like-kind property noting boot’s potential impact on nonrecognition and list several examples of boot. • Determine mortgage boot and property boot identifying whether a taxpayer has given or received boot in an exchange noting the related tax consequences. • Identify the categories of property received in an exchange into noting which category is permitted to recognize loss, recognize how avoiding 1031 can allow clients to potentially increase recognizable losses, and determine the tax treatment of non-recognized losses under 1031. • Identify the general carryover basis rule to calculate a taxpayer’s basis in acquired property by determining its application and specifying the related allocation of basis to multiple properties and boot in an exchange. • Identify property depreciation under 167 particularly as it applies to property used in a taxpayer’s trade or business or held for the production of income noting the impact of ERTA, TRA ’86 and OBRA ’93, determine the changes made by Notice 2000-4, and cite the depreciation requirements of later regulations affecting recovery periods and depreciation methods. • Specify the holding period of acquired property, identify the character of gain or loss recognized in an exchange, and recall the evolution of the installment sale method noting current rules related to exchanges and determine the formula for gain recognized using gross profit, selling price and total contract price under 453. • Recognize a simple test that permits clients and their advisors to determine if an exchange is completely tax-deferred noting the components of the this test, identify the basic computation figures necessary to economically balance an exchange, and specify methods of evening out to insure that all parties get the same value as they give. • Identify the mechanics of a two-party and three-party exchange including related variations involving the cash out of a party. • Identify the distinctions between delayed exchanges and delayed closes particularly as to simultaneity, recall the evolution of delayed exchange requirements from the Starker case through the restrictive TRA ’84 time limits to the present noting the popularity of delayed exchanges and specify unresolved issues for delayed exchanges. • Identify the purpose a longtime exchange technique called “warehousing,” specify the procedural aspects of reverse exchanges under R.P. 2000-37 noting variables impacting its application, recognize the “pot” method recalling the procedural role of “strawmen,” and determine the role of exchange escrows. • Identify the differences between an accommodator and an intermediary, determine how using such parties can facilitate exchanging by avoiding certain holding problems, multiple parties and properties, and transfer difficulties, and recognize a sale and lease-back transaction noting associated exchange complications.