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November 1, 2017Nikki L. Laing
Texas Margin Tax: is It Time For the Curtain Call?
On January 1, 2008, the business landscape changed dramatically for tens of thousands of Texas-based businesses. This change was the result of legislation that made significant revisions to the Texas franchise tax (now commonly called the “margin” tax) by expanding its scope to include entities that never before had been subject to the tax and significantly altering how the tax is calculated. To put it mildly, the margin tax has not been well received, and it is doubtful that it will reach its tenth anniversary.
May 19, 2017Allen Sparkman
Equity Incentive Compensation in Limited Liability Companies
One key difference between equity compensation in alternative entities and in corporations derives from the fundamental difference between the tax consequences of issuing equity in exchange for services in each form of entity. Receipt of stock from a corporation in exchange for services is generally taxable, absent use of an incentive stock option plan, while receipt of interests in an LLC or partnership may be non-taxable if the interests issued are profits interests.
May 19, 2017Steven D. Moore
Texas Margin Tax Changes Expected in the 2017 Texas Legislative Session and Planning Considerations Under Existing Texas Tax Law
These are the presentation slides.
May 19, 2017William H. Hornberger
Choice of Entity - Federal Tax Reform Legislation Overview
This outline discusses certain relevant federal income and Texas state tax considerations relating to the selection of an entity for engaging in business or investment. The outline begins with a discussion of the classification of entities for federal tax purposes and, in particular, the check-the-box regulations. It then provides a summary of some of the principal tax considerations relating to sole proprietorships, C corporations, partnerships, limited liability companies and S corporations. This outline does not address the taxation of trusts and estates, regulated investment companies, real estate investment trusts, real estate mortgage investment conduits, cooperatives, exempt organizations or insurance companies.
March 10, 2017Allen Sparkman
Tax Issues for Business
An experienced tax practitioner touches on several tax issues that businesses encounter: 1) carried interests; 2) taxes on operations; 3) employment taxes and 4) franchise taxes.
March 4, 2016Frank Z. Ruttenberg
Compensation Strategies for the LLC
An LLC taxed as a partnership is one of the most flexible entity forms available today for allocating ownership interests. Unlike the cor porate model, where profits are allocated strictly pro-rata on the basis of the number of shares owned, management and owners of an LLC have virtually complete freedom to allocate profits among members so long as the allocation has "substantial economic effect" under IRC Sec. 704(b).
March 4, 2016Christopher Alan Cunningham
Tax Considerations 101: The Theory and Art of Transactional Tax Planning
The purpose of this paper and the presentation to which it relates are a little different from the usual approach of a CLE presentation. Tax law is constantly changing. Unless you regularly practice in that area, it is likely that all but the most fundamental aspects of tax law that this paper would discuss is likely to change before you would have a chance to put it into practice. What doesn’t really change is the how of practicing tax law. With a primer on tax research and enough fundamental tax law to enable the discussion, the true focus of this paper is an understanding of the mindset and approach that makes tax law advice valuable.
May 21, 2016William H. Hornberger, Steven D. Moore
Federal and State Tax Considerations in M&A Transactions
This outline discusses certain relevant federal income and Texas state tax considerations relating to the selection of an entity for engaging in business or investment. The outline begins with a discussion of the classification of entities for federal tax purposes and, in particular, the check-the-box regulations. It then provides a summary of some of the principal tax considerations relating to sole proprietorships, C corporations, partnerships, limited liability companies and S corporations. This outline does not address the taxation of trusts and estates, regulated investment companies, real estate investment trusts, real estate mortgage investment conduits, cooperatives, exempt organizations or insurance companies.
November 18, 2016Allen Sparkman
Splitting The Pie — Structuring Equity Compensation In Alternative Entities
One key difference between equity compensation in alternative entities and in corporations derives from the fundamental difference between the tax consequences of issuing equity in exchange for services in each form of entity. Receipt of stock from a corporation in exchange for services is generally taxable, absent use of an incentive stock option plan, while receipt of interests in an LLC or partnership may be non-taxable if the interests issued are profits interests.
May 17, 2015George W. Coleman, John C. Ale, Cliff Ernst, Frank Z. Ruttenberg
Compensation Strategies for the LLC
An LLC taxed as a partnership is one of the most flexible entity forms available today for allocating ownership interests. Unlike the corporate model, where profits are allocated strictly pro-rata on the basis of the number of shares owned, management and owners of an LLC have virtually complete freedom to allocate profits among members so long as the allocation has "substantial economic effect" under IRC Sec. 704(b).
March 7, 2014Adrienne R Andle Bond, Allen Sparkman
Operational and Transitional Issues for LLCs or Tax Topics Business Lawyers Can Master
Effectively representing clients in the formation, operation and termination of their LLCs requires both a good working knowledge of state law principles and federal taxation principles. Routine issues of formation, operation and dissolution all have federal income tax effects that can be mastered in their basic format by general business lawyers. The purpose of this paper is to discuss and link the state and federal law issues that commonly arise in the one hour client conference all “general” practitioners have with their clients, and to permit that generalist to more effectively deal with a tax specialist.
March 7, 2014Jennifer T. Wisinski
Shareholder Agreements: Tag Alongs, Drag Alongs and More
Clients that are starting a new privately-held business often carefully consider the form of entity they will use, the capital structure and the tax implications. However, clients may be reluctant to spend time and money on agreements that will govern the potential termination of their business relationship. At the time of formation, the owners are excited about doing business together and may not want to discuss sensitive topics such as whether an owner will be kicked out of the business if the owner becomes disabled and what price will the owner receive for his or her equity interest. On the other hand, clients that have been through the cycle of business ownership before may focus intently on the terms of any shareholders agreement because they have experienced the difficulties of exiting a business relationship.
May 25, 2014William H. Hornberger, Steven D. Moore
Tax Considerations in Entity Choice
This outline discusses certain relevant federal income and Texas state tax considerations relating to the selection of an entity for engaging in business or investment. The outline begins with a discussion of the classification of entities for federal tax purposes and, in particular, the check-the-box regulations. It then provides a summary of some of the principal tax considerations relating to sole proprietorships, C corporations, partnerships, limited liability companies and S corporations. This outline does not address the taxation of trusts and estates, regulated investment companies, real estate investment trusts, real estate mortgage investment conduits, cooperatives, exempt organizations or insurance companies.
November 7, 2014David G. Cabrales, Jason Villalba
Texas Tax Incentive Programs
This paper will discuss several key state incentive programs, and give some treatment to new state government involvement in the existing property valuation limitation program available to local school districts. We will also discuss the work of the recently-appoint Texas House Select Committee on Economic Incentives.
November 7, 2014Michael V. Bourland, Dustin G. Willey
Tax Free Division – Family Business Succession Planning
Family business succession planning is the cornerstone of any successful family business owner’s estate plan. As is often the case, however, planning for the inter-generational transfer of ownership and control of the business becomes complicated by the intra- generational conflicts of the business owner’s heirs. These conflicts among members of the second generation, if severe enough, can render the effective management of the business by the second generation virtually impossible, leading to a loss in productivity and profitability with a resulting decline in the enterprise’s value.
November 7, 2014Dustin G. Willey, Michael V. Bourland
Tax Free Division – Family Business Succession Planning
These are the presentation slides.
May 23, 2013William H. Hornberger, Steven D. Moore
Tax Considerations in Entity Choice
This outline discusses certain relevant federal income and Texas state tax considerations relating to the selection of an entity for engaging in business or investment. The outline begins with a discussion of the classification of entities for federal tax purposes and, in particular, the check-the-box regulations. It then provides a summary of some of the principal tax considerations relating to sole proprietorships, C corporations, partnerships, limited liability companies and S corporations. This outline does not address the taxation of trusts and estates, regulated investment companies, real estate investment trusts, real estate mortgage investment conduits, cooperatives, exempt organizations or insurance companies.
May 26, 2012William H. Hornberger, Steven D. Moore
Tax Considerations in Entity Choice
These are the presentation slides.
November 2, 2012Steven D. Moore
Texas Margin Tax
The applicability of the Margin Tax to limited partnerships removes conversions of corporations to limited partnerships as a means of reducing Texas entity taxes. Conversions to general partnerships, all of whose partners are individuals, remains a way to reduce Texas entity taxes, but this possible tax savings comes with the cost of personal liability.
October 15, 2011Steven D. Moore
Nexus and State Tax Due Diligence
The basic premise for this paper is that more scrutiny is being put on (i) registration to do business requirements and (ii) state tax “nexus” standards than ever before.
May 28, 2011William H. Hornberger
Choice of Entity How to Choose What Entity or Acquisition to Use
This outline discusses certain relevant federal income and Texas state tax considerations relating to the selection of an entity for engaging in business or investment.
April 15, 2011Mario A. Mata
Asset Protection Planning for the Family Business Owner: Strategic use of multiple types of entities and trusts to own and protect closely held family business holdings and related investments
There are multiple tax and legal issues that should be considered when selecting an entity for a proposed business operation or investment. Typically, the tax consequences of the proposed structure and the limited liability available to the owners of the structure are the principal considerations taken into account. However, there are multiple non-tax issues that should also be considered by a client‘s legal advisor when selecting an entity or structure to fulfill the client‘s immediate goals. While the tax and legal issues are significant, serious consideration should also be given to the long-term non-tax issues and estate planning opportunities that a successful entrepreneur will regret not having planned for if not addressed when the entity and/or structure was designed and implemented. As with any legal planning, one must plan for the unexpected. Thus, when choosing a legal entity or structure for the client, it is important that the legal advisor take into account unexpected contingencies, particularly personal marital and creditor issues that might arise in the future. This paper will focus on the planning opportunities available to address such issues with comprehensive business entity planning.
October 22, 2010David Rex, Nate Smithson
Federal Income Tax Effect of Corporate Transactions
This is an outline of the major sub-topics involving federal taxation of business in the purchase or sale of business entities.
October 23, 2009William Paul Bowers
Stimulus Bills and President's 2010 Tax Proposals
These are the presentation slides.
October 23, 2009Steven D. Moore, William H. Hornberger
Texas Margin Tax Update
These are the presentation slides.