Partnerships and LLCs are common choices of entity for family-owned businesses, due to their flexibility and the many uses to which they can be put - including pooling of family assets, succession planning, asset protection, and confidentiality of ownership.
The transfer of partnership and LLC interests among family members is subject to gift and estate tax based on the fair market value of the interests. Valuation discounts are typically applied to reduce the value (and thus the tax cost) of the transferred interests because of various restrictions imposed on the interests that ...
Residents of South Carolina are required to file an income tax return, even if they do not earn income in the state. A resident is an individual who is "domiciled" in South Carolina. South Carolina law does not define domicile. The South Carolina Administrative Law Court (ALC) in a recent decision, however, has analyzed whether a taxpayer was domiciled in South Carolina for purposes of our state income tax. Floyd v. S.C. Dept. of Rev., Admin. Law Ct., Dkt. No. 15-ALJ-17-0458-CC (February 11, 2016).
The taxpayer was a native of Spartanburg, South Carolina. She lived in Oxford ...
Over the past few years, we have seen a dramatic increase in the number of clients interested in holding assets in trust for their children. This is a trend we are noticing across the board, regardless of the size of the estate. This is not due to younger generations' lack of financial savvy or level of sophistication, but more related to the housing market bubble's bursting, uncertainty in the stock market and the fifty percent divorce rate. Parents have shown an increased concern in insulating their children's inheritance from these more prevalent pitfalls. Particularly when the ...
South Carolina requires submission of a Form SC2848, Power of Attorney and Declaration of Representative, in order for an attorney, CPA, or enrolled agent to represent a taxpayer administratively before the South Carolina Department of Revenue (SCDOR). This includes representation in examinations, audits, appeals, tax collection, and other administrative tax matters.
The Form SC2848 has important differences from its current IRS counterpart, including:
- In the Form SC2848 is the notification that "All Notices and Communications will be sent to the taxpayer only.", while the ...
Family limited partnerships have long been a valuable tool of the estate planner. Although historically recognized as providing estate tax planning benefits through the discounted value of assets, these limited partnerships can also implement succession planning goals for the closely-held or family-run business, including the transition of management/leadership for the business.
Limited partnerships provide three key benefits to the business owner:
- a limited partnership is not subject to income tax - it is a "flow-through" entity for income tax purposes;
- in organizing the ...
On June 9, 2016, South Carolina became the 21st state in the country to enact a version of the Uniform Power of Attorney Act ("UPAA") when Governor Nikki R. Haley signed the South Carolina Uniform Power of Attorney Act ("SCUPAA"). The UPAA was approved by the National Conference of Commissioners on Uniform State Laws in 2006 and was intended to provide a simple way for people to deal with their property through the use of a power of attorney in case of their future incapacity.
A power of attorney creates an agency relationship in which a principal appoints or nominates an agent to perform ...
A qualified retirement plan (hereinafter a "Plan") must satisfy the requirements of the Internal Revenue Code ("IRC") in form and in operation. In other words, the documents establishing and governing the Plan must satisfy the IRC requirements and the Plan must be operated in a manner that complies with the IRC requirements. Many plan sponsors confirm a Plan's compliance with the form requirements by obtaining a determination letter from the Internal Revenue Service ("IRS") through the IRS Determination Letter Program.
Based on the form of the documents used to establish the Plan ...
South Carolina has some of the highest business property taxes in the Southeast. The state generally taxes land, buildings, machinery and equipment, and furniture and fixtures, but does not tax inventory, pollution control equipment, intellectual property, and other assets.
To reduce the effect of its high business property tax rates, and to make the state a more competitive environment for business, South Carolina offers a property tax incentive and tax savings for those businesses investing at least $2.5 million over a five year period in the state. This incentive is known as the ...
Many businesses are purchased in South Carolina every year. Many of these same businesses, however, have high worker unemployment claims, and are paying high South Carolina Unemployment Insurance taxes to the state to fund these claims.
South Carolina pays unemployment benefits to people that are out of work. The state funds these benefits through a special tax on employers in the state - the South Carolina Unemployment Insurance Tax, or "UI Tax." The more unemployment claims that are filed with the state and related to an employer, the higher the employer's UI Tax rate will be.
Where a ...
While South Carolina has low income taxes, and comparatively low sales taxes as well, the state makes up for this by having some of the highest business property tax rates in the Southeast. These property taxes are generally levied on the land, buildings and personal property (excluding inventory) of a business in the state.
South Carolina law does authorize its counties, which bill and collect the state's property taxes, to enter into property tax incentive arrangements with businesses, which can reduce property taxes. These property tax incentive arrangements generally require ...