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A buy-sell agreement is crucial for co-owned businesses as it provides structure and protection in various scenarios, whether starting a new venture or inheriting an existing business. This legal contract facilitates the orderly transfer of ownership interests when specific events, such as death, disability, or retirement, occur among co-owners.  A buy-sell agreement turns business ownership […]

Section 119 of the Internal Revenue Code offers businesses the opportunity to provide employees with tax-free meals and lodging under specific conditions, offering both financial benefits and compliance requirements. Here’s a comprehensive overview of the rules and implications involved: Under Section 119, tax-free treatment means employees pay no federal income tax on the value of […]

A buy-sell agreement is crucial for co-owned businesses as it provides structure and protection in various scenarios, whether starting a new venture or inheriting an existing business. This legal contract facilitates the orderly transfer of ownership interests when specific events, such as death, disability, or retirement, occur among co-owners.  A buy-sell agreement transforms a business […]

Here’s a summary of three common scenarios when shutting down a partnership and their federal income tax implications:   Scenario 1: One Partner Buys Out the Other Partner(s) for Cash: In this scenario, one partner buys out the others and continues the business alone. The withdrawing partner will realize a taxable gain or loss from […]

In the realm of tax deductions, business meals stand out as both a necessity for networking and a potential area of scrutiny from the IRS. The Sutter rule, named after a case involving Dr. Sutter and the Tax Court, underscores the delicate balance between legitimate business expenses and personal living costs when it comes to […]