G.61 Intra-family and other business transfer techniques Flashcards

A legally binding agreement outlining how a business owner’s interest will be transferred in the event of death, disability, or departure.

The IRS allows individuals to gift up to a certain amount annually per recipient without incurring gift taxes ($18,000 per recipient in 2024).

An estate planning tool that allows a business owner to transfer business interests while receiving annuity payments for a set period, potentially reducing estate taxes.

A legal entity that enables family members to own and transfer business interests while maintaining control and minimizing estate and gift taxes.

A retirement plan that allows employees to acquire ownership in the company, often used as a business succession strategy.

A financing technique where a seller transfers a business interest in exchange for installment payments that cease upon the seller’s death, potentially avoiding estate tax inclusion.

A transaction where a business owner sells an interest in the company in exchange for a lifetime stream of payments, removing the asset from the taxable estate.

A buy-sell arrangement where co-owners agree to purchase a departing owner’s share, typically funded by life insurance.

A business-funded buy-sell agreement where the company purchases a deceased or departing owner’s interest.

A strategy where a business owner sells assets to a trust in exchange for installment payments, reducing estate taxes while maintaining income tax benefits.