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FAQ: The Qualified Small Business Stock Exclusion

Posted by Brandon Keim | Feb 28, 2025 | 0 Comments

Section 1202, or the Qualified Small Business Stock Exclusion (QSBS), allows shareholders of eligible businesses to realize capital gains without paying tax. The goal of this law is to increase and encourage investment in small businesses. There are certain criteria that the shareholder and business must meet to qualify under Section 1202.

Beware of “OIC Mills”

Posted by Brandon Keim | Feb 21, 2025 | 0 Comments

Taxpayers can apply for Offers in Compromise (OIC) when they are unable to pay the full amount of their unpaid taxes. Taxpayers should be aware of tax scams such as "OIC Mills", which mislead taxpayers into thinking the companies can either make a debt disappear or are able to resolve a tax debt inexpensively.

Understanding Passive Foreign Investment Companies (PFIC)

Posted by Brandon Keim | Nov 22, 2024 | 0 Comments

Taxpayers who are direct or indirect shareholders PFICs must file IRS Form 8621. A PFIC is a foreign company with mostly passive income or assets and Form 8621 is required when receiving PFIC distributions, selling PFIC stock, making certain elections, or filing annual reports under specific IRS sections. Indirect shareholders include those with significant ownership in companies that hold PFIC stock or pass-through entities with PFIC investments. Failure to file correctly can lead to penalties.

The Pros, Cons, and Tax Implications of ESOPs, Part 2

Posted by Brandon Keim | Nov 15, 2024 | 0 Comments

Employee Stock Ownership Plans (ESOPs) allow employees to own shares in their company, but they come with several risks and tax considerations. ESOPs can lose value during bear markets, and since employees' investments are tied to one company’s stock, they lack diversification, increasing financial risk. Administering an ESOP is costly, involving legal, accounting, and compliance expenses. Additionally, shares in an ESOP may be bought back at lower-than-market value. Regarding taxes, ESOPs are typically tax-deferred, meaning taxes are paid when funds are withdrawn. However, early withdrawals before age 59½ can incur a 10% penalty. Employees leaving the company may need to wait for the company to buy back their shares.

The Pros, Cons, and Tax Implications of ESOPs, Part 1

Posted by Brandon Keim | Nov 15, 2024 | 0 Comments

An Employee Stock Ownership Plan (ESOP) is a retirement plan that gives employees ownership in their company through stock. It’s company-funded, tax-deferred, and can increase employee engagement and satisfaction. Employees typically earn more stock over time based on tenure or milestones. While beneficial for both employees and companies, ESOPs come with certain drawbacks and tax implications, which will be discussed in part 2.

When Does a Business Need a TPT License?

Posted by Brandon Keim | Oct 18, 2024 | 0 Comments

Businesses that sell a product or provide services must obtain a state-level TPT license. In addition to a state-level TPT license, businesses may also need a license from any and all cities in which they do business. There are several factors that determine if a business will need multiple state-level TPT licenses.

What is the Nexus Program for TPT?

Posted by Brandon Keim | Sep 06, 2024 | 0 Comments

In Arizona, businesses pay for the privilege of working in the state through the transaction privilege tax (TPT). Determining the requirement to apply for a TPT license is not always easy as different factors are considered to determine the requirements.

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The act of visiting or communicating with Brandon A. Keim via this website or by email does not constitute an attorney-client relationship. Communications from non-clients via this website are not subject to client confidentiality or attorney-client privilege. Further, the articles, discussion, commentary, forms and sample documentation contained in this website are offered as general guidance only and are not to be relied upon as specific legal advice. For legal advice on a specific matter, please consult with an attorney who is knowledgeable and experienced in that area. Attorneys listed in this website practice only in the jurisdictions in which they are admitted. This website is governed by the Arizona Rules of Professional Conduct.

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