Qualified Small Business Stock
News and Insights

Getting the Tax on Qualified Small Business Stock Correct

With the reduction of the corporate income tax rate from 35 percent to 21 percent and the ability to exclude a significant amount of gain on the sale of Qualified Small Business Stock (“QSBS”), many startups choose to organize as C corporations.  Many practitioners believe that gain recognized above the excludible amount is not eligible for regular long-term capital gains and is taxed at a 28 percent tax rate.  This is simply not the case and this misinterpretation has cost founders and other investors significant amounts in additional tax.  It is important that the tax advisor has a thorough understanding of the QSBS rules including the applicable tax rates for certain gain recognized on the sale of QSBS stock. 

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Christopher Klug April 11, 2023
Clowns of the CRUT Part 2 of 2
News and Insights

Clowns of the CRUT (Part 2 of 2)

This is Part 2 of the newsletter on charitable remainder unitrusts (“CRUT”) which is a common planning technique for the charitably inclined high net worth family. As compared to immediate taxation on the gain on the sale of a highly appreciated asset with after tax proceeds being subject to tax annually, the CRUT can allow for superior returns where the distributions to the lifetime beneficiaries will…

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Christopher Klug April 3, 2023
Clowns of the CRUT (Charitable Remainder UniTrust) 1
News and Insights

Clowns of the CRUT (Part 1 of 2)

A charitable remainder unitrust (“CRUT”) is a common planning technique for the charitably inclined high net worth. The CRUT allows for the tax-free liquidation of a highly appreciated asset, the tax-free growth of the assets inside the CRUT, with the income building inside the CRUT being taxed to the extent of distributions to the lifetime beneficiary. As compared to immediate taxation on the gain on the …

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Christopher Klug March 27, 2023
News and Insights

Tax Planning for Foreign Investors

With the global economy we live in, it is important for Fund Managers to have an appropriately structured fund if they plan to have foreign investors.  Too often, the fund structure is not tax efficient for the foreign investor.  If the fund is not structured to accommodate foreign investment, why should a foreign investor consider investing in the fund?

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Christopher Klug March 7, 2023
News and Insights

Comprehensive Planning to Provide the Most Tax-Efficient Structure

CFOs and General Counsel of multinational corporations (non-U.S. parent) with operations in the United States face complex tax implications that must be planned for on a global basis and not make decisions solely based on the U.S. tax implications. Too often, the U.S. advisor will ignore the tax …

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Christopher Klug March 1, 2023
Membership Interest for Services and Purchaser’s Tax Liability
News and Insights

Membership Interest for Services and Purchaser’s Tax Liability

The after-tax proceeds of the sale of a business is of the utmost importance to sellers. Too often sellers agree to holdbacks or a reduction in purchase price for alleged tax issues raised by the purchaser during due diligence where the purchaser bears no actual risk.

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Christopher Klug February 15, 2023
The Importance of Not Over Blocking for UBIT
News and Insights

The Importance of Not Overblocking for UBIT

Taxes play an important role in the structure of a fund. There are various categories of investors that have different tax implications which will impact the structure of a tax efficient fund. One such group of investors are tax-exempt investors and the planning around Unrelated Business Income Tax (“UBIT”)…

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Basswood Counsel February 6, 2023
News and Insights

Klug Counsel PLLC in 2022

We hope you and your family are healthy, safe, and enjoying the holiday season to end 2022. We would like to take this opportunity to update you on exciting developments at Klug Counsel PLLC. We are excited about new members and practice areas that have been added to the firm and the creation of a related entity that will allow us to better serve our clients with accounting and finance support.

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Basswood Counsel December 27, 2022
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