BarbriSFCourseDetails
  1. keyboard_arrow_leftBack

Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Estate Planning

Date & Time
  • event Date

    Tuesday, September 20, 2022

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$297.00

This CLE/CPE webinar will provide estate planners, advisers, and tax counsel with a comprehensive exploration of reducing estate tax liability in corporate recapitalizations. The panel will discuss critical planning and structuring challenges and key considerations in freezing stock value versus holding the stock until death and receiving a step-up basis for income tax purposes.

Faculty

Gilreath Kimberly
Shareholder
Miles & Stockbridge PC

Ms. Gilreath is a tax associate in our Corporate, Securities & Tax Practice Group. She advises clients on a variety of federal and state tax issues in the areas of corporate, partnership, international, and individual income tax.

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio
Fiore Carl
Shareholder
Andersen, LLC

Mr. Fiore has significant experience with tax and financial matters affecting high-net-worth individuals and families. He has worked with numerous families and closely held businesses to develop and implement wealth maximization plans through the use of family entities, income tax planning, stock option planning, charitable giving strategies, and effective gift and estate tax planning.

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio

Description

A stock freeze in a corporate recapitalization can be a valuable and flexible estate planning tool. In its most basic form, a properly structured recapitalization can freeze the value of the owner's stock, potentially reducing the owner's estate tax liability by removing future appreciation in the value of the stock from the estate. Estate planners and tax counsel must understand the complex tax rules to avoid potentially costly consequences and achieve significant income tax savings.

When structuring a stock freeze, the owner of a closely held corporation recapitalizes the corporation by creating two classes of stock (common stock and preferred stock). The owner then transfers part of their interest in the business by gifting or selling the common stock while retaining a portion of the company in the form of the preferred stock. This allows any future appreciation in the business to be attributed to common stock transferred out of the owner's estate with the value of the retained interest remaining constant or frozen.

However, advisers must carefully navigate the technical rules of IRC Section 2701 or the transfer may result in a deemed taxable gift. In addition, advisers must also consider the tax rules and implications of recapitalizing with two classes of common stock, coupling a recapitalization with gifts of stock, distribution rights, qualified payments, and other vital issues.

Listen as our experienced panel provides a thorough guide to the benefits, risks, and structuring techniques of corporate recapitalization and stock freezes in estate planning.

Outline

  1. Advantages of the stock freeze over other techniques
  2. Understanding IRC 2701 provisions
  3. Valuation issues
  4. Structuring the freeze to maximize basis step-up
  5. Drafting and structuring transfers
  6. Sample language and illustrations

Benefits

The panel will review these and other key issues:

  • Typical structures of corporate recapitalization
  • Freeze techniques and structures
  • Gift tax issues to avoid
  • How not to run afoul of the requirements in IRC 2701
  • State and local income tax considerations
  • Recent developments

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify tax issues in corporate recapitalization
  • Ascertain freeze techniques and structures to minimize adverse tax consequences
  • Recognize gift tax issues to avoid
  • Understand how not to run afoul of the requirements of IRC 2701

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).