| Title: |
Planning for Liquidity of Closely Held Business or FLP at Death of Substantial Owner (in cooperation with the Tulane Law School 56th Annual Institute on Federal Taxation) |
| Prerequisite: |
Overview of Federal Income Taxation or comparable knowledge/experience |
| Advance Preparation: |
None |
| Knowledge Level: |
Intermediate |
| Subject Matter Area: |
Taxes |
| Date of Publication: |
December 2007 |
| Copyright © |
2007 by Bisk Education, Inc. All rights reserved. |
| Recommended CPE Credits: |
4 QAS/Registry (50-minute hour) |
| Expiration Date: |
One year from date of receipt to complete program and submit quizzer to obtain credit |
| Passing Grade for Quizzer: |
70 percent or higher |
The death of a private business owner foretells the death of the business in many instances. Less than one-third of all privately owned businesses survive past the first generation. Although it is the goal of many business owners to transfer ownership of the business to future generations, only a small percentage of private businesses survive into the third generation and beyond. There are many reasons for the lack of survival of private business for future generations, including lack of succession planning, business failure, and inability to meet liquidity needs. Lack of business succession planning exacerbates the liquidity needs at the death of a business owner. This program offers guidance on how to advise the private business owner on meeting her/his liquidity needs.
This program is divided into ten (10) chapters and two (2) appendices.
Chapter 1 briefly considers some of the main issues facing private business owners in planning for estate liquidity needs and transferring private business interests to the next generation.
Chapter 2 takes a look at the process for advising private business owners on meeting liquidity needs.
Chapter 3 provides an overview of the IRC §6166 deferral of estate taxes attributable to closely held business.
Chapter 4 examines the definition of closely held business under IRC §6166.
Chapter 5 addresses the mechanics of the IRC §6166 election.
Chapter 6 explores the events that trigger the acceleration of unpaid estate tax under IRC §6166.
Chapter 7 takes a brief look at the effects of IRC §6166 on the credit for tax on prior transfers under IRC §2013 and the estate tax charitable deduction under IRC §2055.
Chapter 8 focuses on the operation of the lien that is created by an IRC §6166 election.
Chapter 9 explores some lifetime planning ideas in dealing with IRC §6166 and how obstacles are overcome by IRC §6166 benefits.
Chapter 10 considers several miscellaneous topics, including the funding of IRC §6166 payments with corporate distributions, redemptions to pay death taxes under IRC §303, and third party borrowing with the estate tax deduction for interest payments.
Appendix A contains IRS Information: Requirement of Estate to Secure IRC §6166 Election by Bond or Lien.
Appendix B contains IRS Audit List of Questions Regarding Real Estate Activities of Real Estate Partnership.