Session Details: Symposium 2018

This is a course on the federal tax treatment of businesses. Using a case study approach, we’ll go through the lifecycle of a business, discussing the implications of critical tax decisions made during formation, operations, and exit. No prerequisites!

We will explore, learn and understand the following to help us better serve our clients:

“Don’t Fear Tax – Embrace It: Building Blocks and Foundational Concepts”

Overview of the federal tax treatment of common business entities, goals for the course, what will and will not be covered, gathering and confirmation of “hot” topics from the audience
The fundamentals of basis, realization, and recognition in the federal tax system
The “Split Personality” of business entities and the tax implications to owners and the entities of forming various business entities
Show me the money! Where and how income or loss from operations flows to owners of various business entities (and the resulting impact on basis)
Let’s get to baking! We’ll introduce our client, Susan Bates, the entrepreneur behind Susan’s Cupcakes. We’ll explore which of the various business entities and tax statuses are good fits for Susan based on her goals. We’ll also explore some strategies and techniques you can use to obtain background information from clients like Susan.

Outline of full course:

1. Why learn the basics of business taxation?

1.1. Command higher fees

1.2. Keep clients in house

1.3. Expand your toolbox

2. Concepts of basis, realization, and recognition in the federal tax system

2.1. How basis, realization, and recognition operate when transferring property into (and out of) business entities

2.2. The impact of various transactions on an owner’s basis in an entity

3. Demystifying the “split personality” of business entities

3.1. Common types of domestic business entities (sole proprietorships, LLCs, partnerships, and corporations)

3.2. Common types of federal tax statuses for domestic businesses (disregarded entity, partnership, S Corp, and C Corp)

3.3. How the common types of federal tax statuses work with state-law governed domestic business entities, like LLCs, corporations, and partnerships

4. A comparison of each federal tax status and its impact on the owner’s net cash from operations

5. Common strategies for adding new owners to a business and the impact of federal tax status decisions

6. Tax implications of staffing the business with employees versus independent contractors

7. The impact of federal tax status on exit strategies for business owners

8. Partnering with CPAs and other professional advisors in representing business clients

We will not be discussing discounting, gift strategies, or other estate planning-oriented uses of business entities during this course. The focus of this course is on the federal income tax treatment of operating businesses, such as mom-and-pop shops, restaurants, real estate businesses, etc.