Taxation By Design

Preparation
Quality - Where Does It Come From
Taxation By Design - Engineered Results

Preparation

- Since 1947 we have been demonstrating to our clients that there are significant tax savings to be realized by having experienced, year-round staff preparing tax returns. We prepare corporate (S corporations, C corporations and Cooperatives), tax exempt entity, partnership, individual, trust, and estate tax returns.

- Can you save money by having our experienced professionals prepare your tax returns? The answer is simple, if you have a business interest and/or complex investment vehicles with related transactions it certainly pays to have our staff prepare your returns. We routinely find lost opportunities and preparation errors when we review prior years returns for new clients.

Quality - Where Does It Come From

- How can a layman distinguish between qualified and unqualified preparers? This is a difficult question. We recommend that you look at the following preparer firm attributes:

1. Tax library
2. Full time or part time staff
3. Affiliations
4. Quality control procedures
5. Computer software

There is also a simple answer, if you or your preparer thinks taxation is filling out forms, you need to educate yourself BIG TIME, read on.......

Taxation By Design - Engineered Results

Taxation - What is it really?

For our firm, taxation means transaction design and implementation, not filling out forms! Strategic transaction design and implementation can save millions, and that is what we are all about.

Here are just a few samples of our transaction design and implementation capabilities.

TRANSACTION	BENEFIT
S corporation versus C corporation decision analysis	The most important decision in the life of a corporation! Expect the wrong decision to cost you no less than 1/3 at liquidation as well as lost fringe benefits, lost deductions to shareholders, limited pension provisions and more.
Deferred compensation planning	Ok, you don't have the correct type of corporation, here is a cure for malpractice.
Like - Kind Exchanges	For investment and business property that you are replacing, this technique can save tens of thousands. We can set you up with a qualified intermediary and all the necessary agreements to properly qualify for this transaction. Buying first before you sell? We have a solution for qualifying so called "reverse exchanges" whereby you sell the old property after acquiring the new.
Compensation with Stock Options including Incentive Stock Options	Stock options are really cool. Employees get paid based upon the company's stock value and the company with little or no cash gets a deduction for the value of the stock, including restricted stock. Best thing since sliced cheese!
Estate and Trust Planning	Many people don't realize that over half of their net worth will be delivered to Uncle Sam upon their death. Uncle Sam is likely to be your primary heir. Pay now, or pay dearly later. The nightmare stories you hear about are true! Learn why and what you do to retain for your intended heirs what you built over a life time.
Limited Liability Company	A flexible organization structure based upon State law permitting corporate, partnership or sole proprietor taxation alternatives. Create your own on-line, free!

Bringing It All Together

The substantial complexity of many areas of US taxation must be carefully and thoughtfully navigated to obtain an engineered outcome for business clients. Otherwise, the chips just fall where they may.

For our business clients, completing a tax form is the simple part. Engineering the taxation attributes to align as planned is extremely complex work. For this reason, we retain the best tax research resources available and supplement with a full time in-house counsel to assist us with drafting documents for our clients to meet our tax design goals.

More specifically, the following topics are just a few of the extremely difficult to navigate areas of tax law. These topics require substantial expertise and knowledge the of many moving parts of income and losses, including multiple sources with comparable and non-compatible tax attributes all coming together on the owner’s personal tax returns. Examples include:

1. Passive vs. Non-Passive Income and Losses - Section 469(c)(7) non-elective and non-passive provision for so-called "real estate professionals". There is also the decision whether or not to elect aggregation measurement of hours within whipsaw exceptions, such as the 100 hour significant participation activities converting passive income to non-passive at the whim of the IRS.

2. Determining when it is appropriate under Reg 1.469-4 to make grouping elections of certain similar businesses, with or without vertical or horizontal economic links. Such elections may be necessary to deduct losses but could just as easily overshoot and work against taxpayers.

3. Section 199A 20% Qualified Business Income Deduction - Techniques such as pension and depreciation elections might keep a taxpayer under the taxable income threshold. Tax planning might show there is a necessity to spin-off qualified versus non-qualified business services. Related to this topic is re-arranging lease terms to meet the "trade or business" requirement. Some of those decisions depend upon which Federal Circuit the taxpayer resides. Likewise, partnerships with guaranteed payments need to grapple with re-writing their LLC Operating Agreements to restructure member interests, preferably with the same outcomes. Unlike pass-through entities, related party rents from C corporations are not automatically treated as qualifying income without significant trade or business tax attributes.

4. For pass-through entities with losses, Reg 1.704(b) allocations (to whom and the amount) rely heavily upon an in depth understanding of debt structures and where appropriate, changing those structures. In all cases, a partnership tax return should not be prepared without a thorough understanding of the entities partnership agreement.

5. Identifying businesses with tax attributes that would benefit from changes in method of accounting, now allowed under the Tax Cuts and Jobs Act (accrual basis business with gross income across all entities of less than $25 mil.)

6. Understanding the effect of State tax provisions upon businesses when addressing the above scenarios.

Bring it all together for your organization by contacting us. Your inquiry is welcomed.

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