Depending on the assets transferred and the facts, the discounts can range from 20% to as much as 45% or 50%, provided they are supported by an appropriate appraisal. The IRS’ position is that these discounts are not appropriate within a family setting. According to the IRS, these family transfers are done only for tax planning and the family remains in direct or indirect control of the transferred asset. (In contrast to an arm’s length purchase of a minority interest by a non-related third party.) … [Read more...] about Are Asset Discounts on Family Transfers a Thing of the Past?
When transfer market close
Description of Technique. Current law allows taxpayers to structure a short-term (e.g., two year) Grantor Retained Annuity Trust (a “GRAT”) without paying any gift tax. A GRAT is an irrevocable trust that pays its grantor annual annuity payments over a fixed trust term. When the fair market value of the property transferred to the GRAT equals the present value of the annuity returned to the grantor based on the IRS assumed interest rate, then the grantor pays no gift tax as the GRAT has been “zeroed-out.” The grantor must survive the trust term for the GRAT to be effective, and a short two-year term minimizes the risk that the trust assets will be returned to the grantor without any tax savings due to his or her death. This ability to fully zero-out the gift for a two-year term has made GRATs very attractive. … [Read more...] about The Perfect “GRAT” Storm: Record-Breaking Low Interest Rates and Depressed Financial Markets
ExpenditureAs discussed above, PSG have committed to a significant expenditure over the next 5 years in the signings of Neymar and Mbappe. Taking total annual salary costs together, PSG are committed to approximately £270M of wages, and £146M of transfer fee payment a year. As such, effectively player and staff spending alone totals £416M and exceeds total revenue of £402M to create a deficit against the latest accounts. Given the other associated costs with running a football club, the figures do appear to be challenging for the purposes of complying with FFP break even requirements. Even with dispensation to incur a break even deficit of €30M over three years, clearly when other operating costs are taken into account there is a significant revenue increase required in order to meet FFP requirements. … [Read more...] about UEFA’s Financial Fair Play Regulations: Neymar, Mbappe and PSG’s transfer policy – “Financial Doping” or Market Forces?
On January 9, 2009, federal legislation (HR 436) was proposed that, if enacted, would eliminate valuation discounts relating to transfers of closely held business interests to the extent of the entity's non-business assets. This legislation especially affects estate planning with regard to family limited partnerships holding cash, bonds, marketable securities and/or real estate (with an exception for real estate activities where more than 750 hours of services are rendered during a taxable year). … [Read more...] about Quick Action: Proposed Legislation May Adversely Affect Transfer Taxation of Closely Held Business Interests
Yet noteworthy transfers into the Chinese leagues have so far proved conspicuous by their absence in the present transfer window. The reason for this appears likely to be linked to the implementation by the Chinese Football Association (the “CFA”) of a 100% ‘tax’ on the signing of any new players. The new rule provides that any loss-making clubs buying players will have to pay the same amount as the transfer fee into a fund, which is designed to help the development of young Chinese players. … [Read more...] about The Chinese Player Transfer ‘Tax’: An Analysis