Message from the Firm
By Brad Cohen
A new Internal Revenue Code Section dealing with deferred compensation imposes acceleration of tax and penalties where a deferred compensation arrangement does not meet certain guideline. The definition of deferred compensation arrangement under the Code is very broad and embraces arrangements that are not commonly thought of as deferred compensation arrangements. This article discusses some of these arrangements and provides guidance regarding the guidelines that must be followed.
A "series LLC" is a special form of limited liability company in which portions of the LLC's assets or operations are segregated within a separate division or "series", while other assets and operations of the LLC are protected from the liabilities of that series. Despite their benefits, for reasons discussed in this article, we do not recommend the formation or use of series LLCs in California at this time.
Participation in a joint venture can involve the consideration of complex business issues. However, if one of the joint venturers is a tax-exempt entity, additional issues must be addressed in order to preserve the tax-exempt entity's tax exemption. Rich Luftman's article addresses those issues that must be considered when contemplating a joint venture between a tax-exempt entity and a for-profit entity, and suggests some operating principles to avoid running afoul of the tax rules.
Reprinted with permission,
© 2006 Reish Luftman Reicher & Cohen. All rights reserved. The Business and Tax Advisor Report is published as a general informational source. Articles are general in nature and are not intended to constitute legal advice in any particular matter. Transmission of this report does not create an attorney-client relationship. Reish Luftman Reicher & Cohen does not warrant and is not responsible for errors or omissions in the content of this report.
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