Category: Articles
-
Section 1045 Rollover: A Tax Planning Tool for QSBS Investors
Section 1045 offers stockholders a valuable opportunity to reinvest proceeds from the sale of qualified small business stock (QSBS) into new QSBS, deferring taxes in the process. This tax provision can be especially useful in a variety of situations, as outlined below. For instance, QSBS holders who sell before meeting Section 1202’s five-year holding period…
-
New IRS Final Regulations on Partnership Liabilities
On December 2, 2024, the IRS released final regulations under Internal Revenue Code (IRC) Sections 704 and 752, addressing a partner’s share of recourse partnership liabilities. These rules, derived from proposed regulations published over a decade ago, provide greater clarity and refinement to the allocation of liabilities among partners. Understanding Code Section 752 IRC Section…
-
FinCEN BOI Filing is Now Voluntary!
The FinCEN Beneficial Ownership Report (BOI) has been the new tax requirement everyone this year is talking about. This requirement came out of the Corporate Transparency Act (CTA) as the latest federal effort to combat financial crimes like money laundering, terrorist financing, and corruption. Enacted as part of the Anti-Money Laundering Act of 2020, the…
-
Form 8804-C: A Tool for Reducing Withholding on Foreign Partnerships and LLCs
Foreign partnerships and LLCs taxed as partnerships often face withholding obligations under Section 1446 of the Internal Revenue Code, which requires partnerships to pay a withholding tax on a foreign partner’s allocable share of effectively connected taxable income (ECTI). However, Form 8804-C, “Certificate of Partner-Level Items to Reduce Section 1446 Withholding Tax,” offers foreign partners…
-
The Importance of 83(b) Elections for Startup Companies
Startups often rely on equity compensation to attract and retain talent while conserving cash during their early stages. Equity grants provide employees, contractors, and even founders with ownership stakes in the business, aligning their interests with the company’s growth and success. Among the tax considerations for equity compensation, the 83(b) election is a critical tool…
-
Moving a Foreign Corporation to the US in a Tax Efficient Way
When foreign entrepreneurs want to relocate operations to the US, there are many tax considerations. An F reorganization offers a strategic pathway for foreign corporations seeking to transition into U.S.-based entities without incurring significant tax liabilities. This process, referred to as a “domestication transaction,” is particularly advantageous when transferring appreciated assets, such as intellectual property,…
-
Depreciation Guide for U.S. Companies Operating Abroad
One of the most common mistakes I see in tax returns coming in is that the depreciation is not handled properly in prior years. What is depreciations? Depreciation allows businesses to recover the cost of tangible property over its useful life. For U.S. companies operating domestically, there are special rules that allow more of this…
-
Making an 83(b) Election on the New IRS Form 15620
On November 7, 2024, the Internal Revenue Service (IRS) unveiled a significant development for taxpayers looking to make Section 83(b) elections. The IRS introduced Form 15620, a standardized form for electing under Section 83(b) of the Internal Revenue Code (IRC) to treat unvested property received in connection with services as taxable upon receipt. Prior to…
-
The Importance of Filing Corporate Meeting Minutes Each Year
Corporate meeting minutes are often an overlooked but essential aspect of a corporation’s compliance and governance. Whether your company is a small startup or an established business with a board of directors, properly recording and filing meeting minutes each year is a critical task that can help protect the integrity of your organization. For business…
-
Step-by-Step Guide to Closing a U.S. Corporation by Year-End
For foreign owners of U.S.-based corporations, deciding to close a business can be an emotional and logistical challenge. Beyond the decision itself, ensuring all legal, tax, and operational obligations are met is critical to avoid ongoing liabilities. Simply ceasing operations isn’t enough—there are specific steps that must be taken to officially dissolve a U.S. corporation.…