What can gifting interests do for a family business?
What can gifting interests do for a family business?
Gifting interests in a closely held business can be an effective estate planning technique. It can save on estate taxes and reward family members for their hard work in running the family business while transitioning ownership to the younger generation. Recently, I worked with a couple who owned a small family business.
Can a parent turn off the gifting spigot?
Obviously, the parents cannot force their son to enter into the agreement, but they can certainly turn off the gifting spigot if he does not. There are lot of options to consider in gifting business interests.
How does gifting business interests affect your tax return?
On his federal income tax return for the year of the gift, Dad treated the nonrecourse partnership liabilities of which he was “relieved” as amounts realized on the gift transfers of his partnership interests.
What happens when a Parent gift a business?
A couple of years before his death, Dad transferred to Son, by gift, his ownership interests in the Partnerships. [viii] Son agreed to be bound by each Partnership’s operating agreement, [ix] but he did not become personally liable on any of the Bank loans.
Gifting interests in a closely held business can be an effective estate planning technique. It can save on estate taxes and reward family members for their hard work in running the family business while transitioning ownership to the younger generation. Recently, I worked with a couple who owned a small family business.
Obviously, the parents cannot force their son to enter into the agreement, but they can certainly turn off the gifting spigot if he does not. There are lot of options to consider in gifting business interests.
On his federal income tax return for the year of the gift, Dad treated the nonrecourse partnership liabilities of which he was “relieved” as amounts realized on the gift transfers of his partnership interests.
What kind of business interest does my dad have?
Dad was a real estate entrepreneur who owned [iv] a 50-percent interest in each of several partnerships (the “Partnerships”) that owned, operated, and actively managed rental real estate. The remaining interest in each partnership was held by an unrelated person.