Applicable Federal Rates for March 2017

The Internal Revenue Code prescribes minimum imputed interest rates and time-value-of-money factors applicable to certain loan transactions and estate planning techniques. These rates are tied formulaically to market interest rates. The Internal Revenue Service updates these rates monthly.

These are commonly applicable rates in effect for March 2017:

Short Term AFR (Loans with Terms <= 3 Years)                                          1.01%

Mid Term AFR (Loans with Terms > 3 Years and <= 9 Years)                    2.05%

Long Term AFR (Loans with Terms >9 Years)                                              2.78%

7520 Rate (Used in many estate planning vehicles)                                     2.4%

Here is a link to the complete list of rates: https://www.irs.gov/pub/irs-drop/rr-17-07.pdf

E. John Wagner, II
jwagner@williamsparker.com
941-536-2037

Williams Parker Represents Taxpayers in Settling $16,000,000 Payroll Tax Audit

Williams Parker shareholder Mike Wilson recently led a Williams Parker team in the representation of several affiliated taxpayers that were under a combined audit by the Internal Revenue Service (the “Service”) in connection with the taxpayers’ treatment of several thousand workers as partners, instead of as employees or independent contractors, for payroll tax purposes over multiple years. By characterizing their workers as partners, the taxpayers’ took the position that the workers’ compensation was not reportable on Form W-2 or subject to withholding or payroll tax obligations. Instead, the compensation was a guaranteed payment, reportable on the workers’ Schedule K-1, and subject to self-employment tax to be paid by the workers. Not surprisingly, the Service took a very aggressive position regarding the classification of the workers as partners, arguing they were properly characterized as employees. With an exposure for the taxpayers of approximately $16,000,000 of tax, interest, and penalties, Williams Parker was able to settle the four-year dispute with the Service for approximately 12 percent of such amount.

What Is Business Succession, Anyway?

Recently, shareholder John Wagner sat down with the Sarasota Herald-Tribune to discuss business succession planning. In the following brief video, John addresses why and when business owners should consider succession planning and provides tips for getting started.

Related Resources:

UHF Antennas Become Even More Obsolete, But Broadcasters Get a Tax Break

Remember adjusting an oddly shaped TV antenna to improve reception on channels higher than 13?  If you do, the memory is likely distant.

Congress noticed a few years ago and mandated that the Federal Communications Commission (the “FCC”) repurpose Ultra High Frequency (a.k.a. “UHF”) broadcast spectrum that carried some of those channels, to create more room for mobile broadband.  The FCC gave licensees holding rights to the repurposed spectrum the option of selling their existing licenses or accepting inferior rights.

One licensee wanted to sell and reinvest in other rights of their choosing without paying capital gains tax on the sale. The licensee asked the Internal Revenue Service to rule that Internal Revenue Code Section 1033, the same provision that allows tax-free reinvestment when the government takes real estate by condemnation, applies to allow tax-free reinvestment of the UHF license rights.  The IRS agreed, even though the taxpayer technically was not forced to sell. The IRS ruled that the option to accept other rights did not prevent Section 1033 tax deferral because the inferiority of the substitute rights the FCC offered justified ignoring that alternative. The IRS found the transaction amounted to a forced sale and therefore qualified for tax deferral.

If the government gives you a “false” choice between selling your property or accepting an inferior alternative, this ruling explains how to defer tax on the sale if you reinvest the proceeds. But we do not recommend trying this strategy with your old UHF TV antenna. You probably won’t recognize gain to defer anyway.

Here is a link to the IRS ruling: https://www.irs.gov/pub/irs-wd/201702034.pdf

E. John Wagner, II
jwagner@williamsparker.com
941-536-2037

Applicable Federal Rates for February 2017

The Internal Revenue Code prescribes minimum imputed interest rates and time-value-of-money factors applicable to certain loan transactions and estate planning techniques. These rates are tied formulaically to market interest rates. The Internal Revenue Service updates these rates monthly.

These are commonly applicable rates in effect for February 2017:

Short Term AFR (Loans with Terms <= 3 Years)                                          1.04%

Mid Term AFR (Loans with Terms > 3 Years and <= 9 Years)                    2.10%

Long Term AFR (Loans with Terms >9 Years)                                              2.81%

7520 Rate (Used in many estate planning vehicles)                                     2.6%

Here is a link to the complete list of rates: https://www.irs.gov/pub/irs-drop/rr-17-04.pdf

E. John Wagner, II
jwagner@williamsparker.com
941-536-2037

SEMINAR: Succession Planning II – “How Did Your Plan Really Work?”

ACG logo

Williams Parker is pleased to serve as the Annual Sponsor of the Association for Corporate Growth’s Sarasota programming. On February 2, ACG is hosting “Succession Planning II – How Did Your Plan Really Work?” at the Sarasota Yacht Club.

The panel, moderated by Williams Parker attorney Robert W. Benjamin, features Taylor T. Collins and James B. Tollerton of PBI, as well as founder and CEO of Miles Partnership, Roger Miles.

In October, ACG presented a panel on how and when to successfully exit your business. At the upcoming seminar, the panel of business owners who have successfully implemented a succession plan will discuss the following:

  • What went right?
  • Were there any unexpected events or consequences and how did you deal with them?
  • What advice would you give a business owner planning for ownership succession?
  • What were the challenges of the transition from the perspective of the successor to the business?

Thursday, February 2, 2017
5:30 to 8:00 p.m.
(Cocktails/appetizers 5:30 – 6:30; Panel to begin at 6:30)
Sarasota Yacht Club
1100 John Ringling Blvd. Sarasota, FL  34236

Please contact us if you are interested in attending.

Applicable Federal Rates for January 2017

The Internal Revenue Code prescribes minimum imputed interest rates and time-value-of-money factors applicable to certain loan transactions and estate planning techniques. These rates are tied formulaically to market interest rates. The Internal Revenue Service updates these rates monthly.

These are commonly applicable rates in effect for January 2017:

Short Term AFR (Loans with Terms <= 3 Years)                                          0.96%

Mid Term AFR (Loans with Terms > 3 Years and <= 9 Years)                    1.97%

Long Term AFR (Loans with Terms >9 Years)                                              2.75%

7520 Rate (Used in many estate planning vehicles)                                     2.4%

Here is a link to the complete list of rates: https://www.irs.gov/pub/irs-drop/rr-17-02.pdf

E. John Wagner, II
jwagner@williamsparker.com
941-536-2037

Applicable Federal Rates for December 2016

The Internal Revenue Code prescribes minimum imputed interest rates and time-value-of-money factors applicable to certain loan transactions and estate planning techniques. These rates are tied formulaically to market interest rates. The Internal Revenue Service updates these rates monthly.

These are commonly applicable rates in effect for December 2016:

Short Term AFR (Loans with Terms <= 3 Years)                                          0.74%

Mid Term AFR (Loans with Terms > 3 Years and <= 9 Years)                    1.47%

Long Term AFR (Loans with Terms >9 Years)                                              2.26%

7520 Rate (Used in many estate planning vehicles)                                     1.8%

Here is a link to the complete list of rates: https://www.irs.gov/pub/irs-drop/rr-16-27.pdf?_ga=1.114444423.1043379965.1429544687

E. John Wagner, II
jwagner@williamsparker.com
941-536-2037

Post-Election Flashback: A Tax Break For Federal Executive Office Appointees

With President-elect Donald Trump’s cabinet appointments at the forefront, we revisit our August 2016 post examining a capital gains tax break for federal executive appointees who must sell assets to avoid conflicts of interest.  We noted that appointees with unrealized capital gains in undiversified assets could use the law to diversify without paying capital gains tax, creating a tax break vastly more valuable than anything else they earn from their positions.

Here is a link to our original post:  http://blog.williamsparker.com/businessandtax/2016/08/17/want-diversify-appreciated-asset-position-without-paying-capital-gains-tax-take-federal-government-job-conflict-interest/

Here is a link to a November 8 International Business Times article quoting our post and further examining the tax deferral law: http://www.ibtimes.com/political-capital/wall-street-titans-could-get-tax-benefit-taking-jobs-trump-or-clinton-white-house

Are any potential Trump appointees likely to benefit?  Decide for yourself after reviewing a roster of potential appointees:   https://www.washingtonpost.com/graphics/politics/trump-administration-appointee-tracker/?hpid=hp_hp-top-table-main_cabinet-graphic-135pm%3Ahomepage%2Fstory

E. John Wagner, II
jwagner@williamsparker.com
941-536-2037

Ally Law London Firm Wins Article 50 Brexit Challenge

Williams Parker has international reach as the Florida member of Ally law – one of the world’s leading law firm networks. Our companion firm in London, Edwin Coe, represented the winning claimant, Dier Dos Santos, in the high-profile litigation in the U.K. challenging Article 50 and the Brexit vote. The High Court of Justice ruled that based on a 300-year-old law, the U.K. government does not have the constitutional capacity to trigger U.K.’s withdrawal from the European Union without a Parliamentary vote. More information on the ruling and its consequences can be found here.

Williams Parker regularly works with Ally Law attorneys to make sure our clients receive the legal support they need wherever in the world they might operate or have investments. Ally Law includes over 1,300 lawyers in 41 countries. More information on Ally Law can be found on our website.

Michael J. Wilson
mwilson@williamsparker.com
941-536-2043