Seminar Replay - Session 1 - Agricultural Business and Tax Planning Seminar

Gregory Bouchard
September 22, 2017

Session One: Business Succession Planning for Agricultural Clients

Transferring the closely-held business can be challenging. This session is designed to explain how to take advantage of the partnership structure to both build the net worth of the younger generation while providing for the comfortable exit of the older
generation. Along the way, the Internal Revenue Code has placed a few land mines but also some nuggets of gold. The goal is to provide an effective road-map to increase the after-tax wealth of your clients. A case study (including federal tax forms) will be
used throughout the session.

This session covered:

  1. An overview of partnership taxation (including limited liability companies taxed as partnerships). Topics will include tracking basis, various debt issues and transactions between partners and the partnership.
  2. A review of gifting and sale of partnership interests – opportunities but also limitations and pitfalls.
  3. The use of guaranteed payments to shift income as well as to reward extra effort and capital contributions.
  4. The need to maintain market value capital accounts along the way to chart progress. In many instances, the IRS requires capital accounts to be maintained; however, these capital accounts do not tell the family very much about who owns what, how they got there, and what they can do to change course.  
  5. What the Internal Revenue Code provides in terms of granting a profi ts interest and then present in detail how this tool can be used to reward the younger generation. An effective transfer strategy requires a profitable business, good records (including an accurate market value balance sheet), the maintenance of capital accounts, and a tax return and operating agreement that ties it all together.
  6. A discussion of exit strategies with a focus on the retiring partner provisions afforded to partnerships under IRC §736.

Session Two: Top Five Estate Planning Dangers:

Session Three: Ethical Issues for Tax Professionals:

To purchase the electronic manual and powerpoints from this seminar, please contact Tiffany:

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CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

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