Estate planning

A cautionary tale for tax planning: timing is critical


This cautionary tale is based on the recent tax case of Hohenshead Estate v CommissionerTC note 2023-34. When company owners plan to sell their business, there is often a desire to minimize the income tax generated. This tax actually taxes the increase in the value of a business often acquired over many years and decades in one year. The resulting tax is often at the highest marginal rate, which greatly reduces the net proceeds for the seller.

Several tools are used to reduce income tax in this state Charitable giving an item. When properly planned and executed, three separate objectives are achieved.


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