Tax Warrior Chronicles

Your Kids in the Family Business Post-Trump Tax Reform

Posted on Mon, Aug 12, 2019

By: Melissa Boyce, CPA


The Tax Cuts and Jobs Act of 2017 (TCJA) changed many areas of the tax code, including when family business hires their child(ren). While there was a similar pre-TCJA benefit to hiring one’s child(ren), the new law increased several tax savings and warrants another look at hiring children into the family business.


Income Shifting

The largest benefit of hiring a child into a family-owned business is the ability to convert the parents’ high-taxed income into tax-free or low-taxed income. There are rules that must be followed; specifically, the children’s work must be legitimate, and the amount the enterprise pays them must be reasonable for the wages to be

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Keep Your Eye on the Exit

Posted on Thu, Oct 11, 2018

By: Michael W. Donahue, CPA, CFP, MT


In the past few years, we have assisted family business clients in a time of strong economic growth. This growth continues across many industries. In meeting with these clients, we’ve noticed an increase in the owners’ interest in “cashing in” on their businesses’ value. Getting to the best possible sale price is the focus of today’s blog.


When we discuss available sale options with owners, there are essentially two – an internal sale or an external sale. An internal sale is really a shift in ownership to either the next generation or a combination of the next generation and management. Most of these sales are external sales, and usually to private

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IRS Formally Withdraws Proposed Estate Transfer Regs

Posted on Fri, Nov 03, 2017

By: Karolyn Banks, CPA, MT


The IRS recently withdrew controversial proposed regulations under Internal Revenue Code (IRC) section 2704 that would have placed restrictions on the ability to use discounts for lack of marketability and control.  The Tax Warrior perspective of the originally proposed regulations was that family business planning would be more challenging. Here’s why we believe family businesses dodged the proverbial bullet.


The proposed regulations were extremely broad in their application.  The IRS’s aim was to prevent the undervaluation of transferred interests in corporations and partnerships for estate, gift and generation-skipping transfer tax purposes. The

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