Choice of Entity Under the New Tax Law: Avoiding Tax Pitfalls in Operations, Ownership Changes, Exit Strategies

Capital vs. Profits Interest, Allowable Deductions, Distributions, Exclusions and Other Planning Considerations

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Wednesday, January 23, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE webinar will provide practical guidance to counsel and advisers on the challenges in choice of legal entity under the new tax law. The panel will discuss key provisions of the new tax law to be considered in entity selection, avoiding the tax pitfalls in operations and asset or stock sales. The panel will also discuss capital vs. profits interest, allowable deductions and exclusions under the new tax law, exit strategy planning, and other key considerations for effective business planning.

Description

The new tax law has made sweeping changes to the tax code, impacting decisions on entity selection upon formation or potential conversion to another entity form. Choosing an entity’s legal structure has become complex with the enactment of new tax law that includes key provisions such as a reduction in the corporate tax rate, the new qualified business income deduction for pass-through entities, new rules on carried interest, and the variety of limitations that must be considered by counsel.

Choice of entity considerations for start-ups must involve a planning approach to structuring the company that will enable it to achieve its financial and operational goals. For those that intend to issue stock/options, raise capital, spin off separate business lines, or deal with the special issues of cashing out or business succession, the choice of entity at the beginning can have significant tax and operational impact on the business. For pass-through entities that have to navigate the 20% tax deduction and its many exceptions, a company’s current or intended activities must be evaluated. For others, a conversion to a C corporation should be an available option as well.

In addition, state law is also an important consideration when choosing a legal entity. Some states have different tax rates for different entities and are also taking different approaches to the extent at which they conform to new federal tax law for state income tax purposes. The complexities involved in entity selection or conversion require counsel to provide guidance to business owners to set up the right type of entity to meet initial goals with the flexibility to change the entity form as the business evolves. Failure to do so can create avoidable tax difficulties for business owners in the operation, liquidation or succession of the business.

Listen as our experienced panel provides a detailed examination into the tax planning considerations and opportunities in advising clients on choosing a business entity.

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Outline

  1. Key provisions of the new tax law impacting choice of entity decisions
  2. Impact to business operations and available planning opportunities
  3. State law considerations in choice of entity
  4. Treatment of distributions based on entity form
  5. Consequences and potential opportunities in changing entity form
  6. Effective exit strategy techniques avoiding pitfalls stemming from entity form

Benefits

The panel will discuss these and other critical issues:

  • Tax and operational considerations for entity structuring
  • Planning opportunities and allowable deductions and exclusions under new tax law
  • State law considerations and planning opportunities
  • The impact of differing entity form in structuring compensation
  • Capital vs. profits interest and treatment of distributions based on entity structure
  • Implications and opportunities in changing entity form
  • Exit strategy techniques and avoiding unintended operational and tax consequences

Faculty

Jodz, Meghan
Meghan R. Jodz

Partner, Tax Services
Grant Thornton

Ms. Jodz heads the M&A tax practice for the Firm's Atlantic Coast Market. She has extensive experience...  |  Read More

Stromberg,Thomas
G. Thomas Stromberg
Partner
Perkins Coie

Mr. Stromberg concentrates his practice in representing managed money that is invested in the acquisition and financing...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

48 hours after event

$297

Download

48 hours after event

CPE Not Available

$297

DVD

10 business days after event

CPE Not Available

$297 + $19.45 S&H