IRS on minority interest discounts:it don't mean a thing if it still got that swing
Article Abstract:
The degree to which valuation of minority interests in stock in a family corporation should be adjusted based on the interests held by both the donor and donee is of great relevance to estate and gift tax planners. Two recent Technical Advice Memoranda conflict on whether other interests held by the donee and other shareholders are relevant. Some discounts have been disallowed or reduced because a minority interest constituted a swing vote that would ensure certain recipients majority control. Inter vivos gifts have greater valuation flexibility because estate tax valuation only considers the value to the decedent.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1995
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A prime-er on Code sec. 419A welfare benefit plans
Article Abstract:
The Tax Court in 1997's Booth v. Commissioner provided factors distinguishing IRC deferred compensation section 404(a)(5) from welfare benefits section 419A. The court held that the plan with contingent dismissal wage provisions was a welfare benefit plan. The decision was a rejection of the IRS's policy as stated in IRS Notice 95-34. That policy was that plans with mixed attributes of deferred compensation and welfare benefits would be treated as deferred compensation. The case does not resolve all section 419A issues.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1998
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IRS on welfare benefit plans: Notice 95-34 "nonqualified deferred compensation by any other name would be just as nondeductible."
Article Abstract:
The IRS has provided a tax-favored multiple employer trust exception under IRC section 419A(f)(6) to the policy it announced in Notice 95-34 that disfavors use of welfare benefit plans. Welfare benefit plans are subject to abuse when employers overfund the plans to defer compensation to shareholders and executives. The exception grants current deductions for legitimate welfare plans that use actuarial contribution valuations and are intended to reduce the risks faced by individual employers.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1995
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