Louis Vlahos on Tax Deductions

Taxing A Foreigner’s Sale of a Partnership Interest – Déjà Vu All Over Again

There is no denying that many parts of the Code are complex and, in some cases, too obscure for many “laypersons” to comprehend. Over time, this reality spawned the need for advisers who are both knowledgeable and experienced...more

8/12/2024 / Business Expenses , Capital Gains , Fair Market Value , Foreign Persons , Internal Revenue Code (IRC) , IRS , Limited Liability Company (LLC) , Non-Resident Aliens , Partnership Interests , Tax Cuts and Jobs Act , Tax Deductions , Taxable Income

“C’mon Man! Tax the Rich!” Business Owners Face Tax Increases*

Last week, Sen. Warren reintroduced her “Ultra-Millionaires” wealth tax proposal to the Senate. Query her timing. The measure has the proverbial snowball’s chance in Hell of being enacted by this Congress.Perhaps the Senator...more

Nothing Lasts Forever –Expiring Tax Provisions

The Long-Term View- Among its core functions, federal tax policy seeks to encourage those behaviors among businesses that, in the long run, will have a lasting positive effect upon the nation’s economy as a whole. ...more

1/26/2024 / Federal Taxes , Gift Tax , Income Taxes , Internal Revenue Code (IRC) , IRS , Itemized Deductions , MACRS , Modification , Sunset Provisions , Tax Cuts and Jobs Act , Tax Deductions , Tax Exemptions , Tax Legislation , Tax Rates

Partnership Losses on Related Party Sales – The IRS Provides Some Clarification

Few individual owners of a closely held business would be surprised if you explained to them that the IRS and the Federal courts generally will subject many transactions between certain “related” persons to heightened...more

1/17/2024 / Aggregate Damages , Audits , Business Losses , Capital Gains , Closely Held Businesses , Family Businesses , Family Members , IRS , Partnerships , Proposed Regulation , Related Parties , Tax Deductions

The Family Business – Compensating Family-Employees

Hope you had a good Thanksgiving Holiday. Some of us probably feel we ate or drank either too much or not enough, watched too much or not enough football, or spent too much time discussing politics and the state of the...more

In NYC, Cannabis Business Expenses Now Deductible

New York Governor Kathy Hochul signed a bill on Friday, November 20, 2023, that allows New York City cannabis businesses to deduct business expenses paid or incurred in carrying on such business for purposes of determining...more

11/21/2023 / Business Expenses , Business Taxes , Cannabis-Related Businesses (CRBs) , Controlled Substances Act , Internal Revenue Code (IRC) , Marijuana Related Businesses , New Legislation , New York , Schedule I Drugs , Tax Deductions , Tax Liability

Activities Contrary to Public Policy – Revoking the Tax Exempt Status of Universities

It appears that many of the country’s colleges and universities believe they have not already contributed enough to the decline of American education and to the erosion of our society, generally. These institutions of...more

11/9/2023 / Activist , Annuities , Bad Actors , Business Income , Colleges , Dividends , Donors , Endowment Funds , Executive Compensation , Exempt Organizations , Federal Funding , Hate Speech , Income Taxes , Internal Revenue Code (IRC) , IRS , Non-Taxable Income , Operational Requirements , Public Charities , Public Policy , Rent , Royalties , Student Loans , Students , Tax Benefits , Tax Deductions , Tax Exemptions , Tuition , Universities

Hospitals and Community Benefit: Senators See a Shortfall

For many weeks, we’ve been hearing about the IRS’s plans to use the funding provided under the Inflation Reduction Act[i] to increase and expand its compliance and enforcement efforts with respect to the wealthy, high-income...more

10/27/2023 / Affordable Care Act , Charitable Donations , Charitable Organizations , Excise Tax , Hospitals , Income Taxes , Inflation Reduction Act (IRA) , IRS , Medicaid , Reporting Requirements , Tax Deductions , Tax Exemptions

Should Closely Held Businesses Be Charitable?

Faulty Framework? The question posed above is not intended to be rhetorical. Rather, it is one that the owners of a closely held business should consider thoroughly before transferring or committing any business assets to...more

8/4/2023 / Charitable Donations , Charitable Organizations , Charitable Trusts , Closely Held Businesses , Fair Market Value , Family Businesses , For-Profit Corporations , IRS , Nonprofits , Public Charities , S-Corporation , Tax Court , Tax Deductions

Partnership Losses But No Outside Basis? Too Bad

Losses Weren’t Always Bad- Most tax advisers are aware that, prior to the Tax Reform Act of 1986 (the “TRA”),[i] the Code placed few limitations on the ability of an individual taxpayer to use deductions from a particular...more

7/27/2023 / Business Losses , Capital Contributions , Deficit Reduction , IRS , Limited Liability Company (LLC) , Membership Interest , Net Operating Losses , Non-Recourse Loans , Partnership Interests , Partnerships , Passive Losses , Promissory Notes , Tax Court , Tax Cuts and Jobs Act , Tax Deductions , Tax Losses , Tax Planning , Tax Reform

New York Examines Federal Income Tax Issues –Conformity and . . . Disclosure?

Many years ago, New York revised its personal income tax law to achieve close conformity with the Federal system of income taxation. The stated purpose for the revision was to simplify tax return preparation, improve...more

3/27/2023 / Adjusted Gross Income , Audits , Documentation , Income Taxes , IRS , New York , Real Estate Professionals , Rental Property , State Taxes , Tax Appeals , Tax Deductions , Taxable Income , Taxation

Tax Losses Realized During the Crypto Winter

Debacle- Understanding the etymology of a word often enables us to better understand or appreciate its use in contemporary speech. For example, the word “crypto” is derived from the Greek word “krypto,” which describes...more

1/20/2023 / Bitcoin , Capital Gains , Cash Value , Cryptocurrency , Debentures , Digital Assets , Fair Market Value , Federal Taxes , Investment , IRS , OCC , Tax Deductions , Tax Losses , Virtual Currency

Generating Tax Losses as a Hobby

Every now and then, some well-meaning colleague will ask how I spend my free time. I usually pause before responding – to gather my thoughts – which prompts them to restate their question with what they believe is greater...more

1/13/2023 / Business Income , Business Profits , Income Taxes , Investment , IRS , Loans , Profits , Tax Court , Tax Deductions , Tax Losses , Tax Planning , Taxable Income

Transacting With One’s Business – Keep It Arm’s Length

Don’t Be Unreasonable- Much has been written of late regarding the payment by a business of various personal expenses incurred by its owner or certain key employees. The payment of an owner’s personal expenses appears to...more

12/16/2022 / Arms Length Transactions , Business Expenses , Business Ownership , Closely Held Businesses , Compensation , Family Businesses , IRS , Personal Use , Reasonable Compensation , Selling a Business , Tax Deductions , Tax Liability , Taxable Income

Private Foundations, Closely Held Businesses, And Distribution Requirements

“Show Me the Money”- Much has been written in recent months about how well the investment portfolios of private foundations have performed over the last several years. For example, a study conducted by the Council on...more

10/12/2022 / Bipartisan Budget Act , Business Income , C-Corporation , Charitable Organizations , Closely Held Businesses , Distribution Rules , Donor-Advised Funds (DAFs) , Internal Revenue Code (IRC) , Investment Portfolios , IRS , Private Foundations , Required Minimum Distributions , S-Corporation , Tax Deductions , Tax Liability

Business Expenses Paid by Shareholder, But Whose Deduction Is It?

Constructive Transfers- It is axiomatic that the tax treatment of interactions between a closely held business and its owners will generally be subject to heightened scrutiny by the IRS, and that the labels attached to such...more

9/27/2022 / Business Expenses , Business Taxes , C-Corporation , Closely Held Businesses , Deductions , Investment , IRS , Parent Corporation , Personal Exemptions , S-Corporation , Shareholders , Tax Court , Tax Deductions

The Transaction That Failed – Tax Treatment of Termination Fees

Deal Costs, Generally- Every purchase and sale of a business, whether from the perspective of the seller or the buyer, is about economics, and few items will impact the economics of the transaction more certainly or...more

7/12/2022 / Capital Assets , Capital Losses , CCA , Income Taxes , IRS , Limited Liability Company (LLC) , Selling a Business , Target Company , Tax Benefits , Tax Deductions , Termination Fees

Unreasonable Compensation As Constructive Dividend, Redux

An often-explored theme of this blog is the frequency with which similarly situated owners of similarly situated closely held business, facing a similar set of economic circumstances, and presented with a similar set of...more

5/3/2022 / Appellate Courts , B Corporation , C-Corporation , Closely Held Businesses , Compensation , Dividends , Entrepreneurs , Management Fees , Reasonable Compensation , Shareholders , Stocks , Tax Court , Tax Deductions , Written Agreements

Tax Court’s Decision On Assumption of Liability in M&A – A Clean Block or Goaltending?

Assumed Liabilities- If a taxpayer were to sell the assets that comprise the taxpayer’s business, they would realize gain if the amount realized by the taxpayer from the sale is more than the taxpayer’s adjusted basis for...more

3/4/2022 / Acquisitions , Amended Tax Returns , Deferred Compensation , Investment Property , IRS , Limited Partnerships , Sale of Assets , Tax Code , Tax Court , Tax Deductions , Tax Liability

The Liquidation of a Partner’s Interest Under NYC’s Unincorporated Business Tax

Taxes and Snowy Weather? How many of you awoke Saturday to find that the winter storm about which we had heard so much during the preceding days had lived up to its hype? What was your first thought? “Fudge,” right?...more

2/4/2022 / C-Corporation , Income Taxes , IRS , Liquidation , New York , Partnerships , Pass-Through Entities , S-Corporation , State Taxes , Tax Authority , Tax Deductions , Taxable Income , Unincorporated Business Tax (UBT)

Selling to Private Equity? Maybe You Should “F Reorg” First

Having Fun? Hope you had a decent weekend. Perhaps you did something interesting, maybe even fun, like some end-of-season apple picking? Or maybe you had a cider donut with some hot coffee at a farm stand you stumbled upon...more

11/10/2021 / Acquisitions , Adjusted Gross Income , Capital Gains , Fair Market Value , IRS , Limited Liability Company (LLC) , Long-Term Investment Funds , Mergers , Net Investment Income , Partnerships , Popular , Private Equity , Reorganizations , Rollover Equity , S-Corporation , Sale of Assets , Surcharges , Surtax , Tax Deductions

4/7/2021 / Business Income , Governor Cuomo , Income Taxes , IRS , Itemized Deductions , New York , Pass-Through Entities , S-Corporation , SALT , Shareholders , State and Local Government , State Budgets , State Taxes , Tax Cuts and Jobs Act , Tax Deductions , Taxable Income

Louis Vlahos

Rivkin Radler LLP

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