Tax Issues in Buy-Sell Agreements

Structuring Agreements for Optimal Income and Estate Tax Results for Partners and Shareholders

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

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Conducted on Wednesday, August 11, 2010

Recorded event now available

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Course Materials

This CLE course will prepare tax counsel to address key components of buy-sell agreements, including valuation methodologies and timing, as well as the income and estate tax implications that must be considered in structuring the agreements.


Buy-sell agreements are critical to protect a company, partnership or LLC against high-risk events that threaten the stability and survival of the entity, such as a member's or owner’s death, disability, retirement, termination, or sale of interest to a third-party nonmember.

Structuring a buy-sell agreement, involves complex income and estate tax planning at every stage of the process from the type of the buy-out, the funding mechanism, trigger events and price and payment terms.

LLCs and closely held corporations are often illiquid thus necessitating a reliable means of valuing both the entity as well as the member’s ownership interest. There are, however, hidden income and estate tax considerations that arise in valuation methodologies.

Listen as our authoritative panel of tax attorneys guides you through the critical components of a buy-sell agreement and how to structure the agreement for the best tax result.



  1. Critical buy-sell provisions
    1. Structuring the buy-out: cross-purchase v. entity purchase; cross-insurance trusts
    2. Funding mechanisms: insurance, cash flow, loans, sinking funds, reserves, installment payments
    3. Trigger events: lifetime transfers, termination, retirement, disability, death
  2. Purchase price and payment
    1. Key factors in determining price
    2. Payment terms
  3. Valuation issues
    1. Valuation of company
    2. Valuation of ownership interest
    3. Methodologies and timing


The panel will review these and other key questions:

  • What are the tax implications for cross-purchase v. redemption forms of buy-sell agreements?
  • What income tax ramifications arise in the various methods of funding the buy-out?
  • What estate tax planning opportunities must be addressed when structuring buy-sell agreements?


Steven M. Dane
Steven M. Dane

Kostin, Ruffkess & Company

He has over 26 years of professional experience concentrating in the areas of valuation and litigation support...  |  Read More

Allen M. Silk
Allen M. Silk

Stark & Stark

He chairs the Firm’s Business & Corporate Group. His experience includes a broad range of tax, trusts and...  |  Read More

Brian E. Hammell
Brian E. Hammell

Cushing & Dolan

He is the Director of the firm’s Corporate Department. His practice concentrates in business law, employment law,...  |  Read More

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