The Cummings & Cummings Law Journal

What an Irrevocable Life Insurance Trust Is and Why It Exists An irrevocable life insurance trust (ILIT) is a specialized estate planning vehicle designed to own one or more life insurance policies outside the insured’s taxable estate. Properly structured and administered, an ILIT can remove death benefit proceeds from estate tax exposure under Internal Revenue

Understanding the ERISA Framework That Governs an IPS An Investment Policy Statement for an ERISA-covered retirement plan is not legally mandated by statute; however, it is treated by regulators and courts as a foundational document that evidences procedural prudence. The Employee Retirement Income Security Act imposes fiduciary duties of loyalty and prudence, which are process-centric.

For property owners seeking tax-efficient diversification and liquidity, a contribution under Section 721 into a Real Estate Investment Trust may offer a disciplined path. The process is intricate, highly negotiated, and sensitive to timing, valuation, and debt allocation. What seems like a straightforward contribution of appreciated real property to a REIT’s operating partnership is, in

Understanding the 338(h)(10) Election The Section 338(h)(10) election allows a qualifying stock acquisition to be treated, for tax purposes, as if the buyer purchased the target’s assets directly. In practice, this means the buyer receives a stepped-up tax basis in the target’s assets, while the seller is treated as having sold assets rather than stock.

Copyright Ownership and Authorship of AI-Generated Marketing Content Many businesses assume that if they “created” the prompt, they own the output outright. The reality is more nuanced. In the United States, works created entirely by non-human actors generally do not receive federal copyright protection. If your marketing materials are comprised primarily or exclusively of machine-generated

Why a Protective Section 83(b) Election Matters When Classification Is Uncertain A protective Section 83(b) election is a strategic filing made when there is uncertainty about whether an award is “property” for purposes of Section 83 of the Internal Revenue Code or whether Section 83 applies at all. In plain terms, you file the election

Understanding Who the “Foreign Entity” Is and Why Classification Matters Before any foreign organization commits funds to a U.S. charity, it is essential to define precisely what the donor is. The U.S. tax code distinguishes among foreign corporations, partnerships, trusts, estates, and disregarded entities, and each category can encounter significantly different tax and reporting outcomes.

Defining the Co-Packing Relationship and Scope of Work A co-packing agreement in the food and beverage industry is not a simple “make-and-ship” arrangement. It is a complex, ongoing commercial relationship that must precisely allocate duties for formulation, ingredient sourcing, manufacturing, packaging, quality assurance, and delivery. An effective agreement begins with a detailed scope of work

Understanding Earn-Out Clauses in Mergers and Acquisitions An earn-out clause is a contingent payment mechanism that defers a portion of the purchase price based on the post-closing performance of the target business. In practice, it is a bridge over a valuation gap, allowing a seller to participate in upside that may not be fully reflected

Confirm State Law Authority and Governing Document Compliance Before a company hosts a virtual shareholder meeting, the first legal inquiry is whether the applicable state corporate statute permits virtual-only or hybrid meetings, and under what conditions. Many jurisdictions explicitly authorize remote meetings if certain technological conditions are satisfied, such as the ability to verify participants,

The Regulatory Meaning of “Covered” Versus “Non‑Covered” Activities Is Not Intuitive In health care, the simple question “Is this activity covered?” rarely has a simple answer. Covered activities can refer to several distinct regulatory regimes: the Health Insurance Portability and Accountability Act (HIPAA) rules for covered entities and business associates; Medicare and Medicaid reimbursement rules;

Why Entity Type Drives the Tax Result in a Merger At a high level, many business owners assume that a merger simply combines two balance sheets and operations, and that the tax consequences are largely incidental. That assumption is dangerous. The federal and state tax outcomes turn on the tax classification of each party: C

Understanding What Constitutes a Complete Liquidation of an S Corporation A complete liquidation of an S corporation is not simply “closing the doors.” It is a legally and tax-significant process in which the corporation ceases business, winds up its affairs, sells or distributes its assets, pays creditors, and makes one or more liquidating distributions to

Understand What Qualifies as a Trade Secret Before Diligence Before any documents are uploaded, described, or even summarized to a prospective buyer, you must align your team on what specifically constitutes a trade secret. Under typical U.S. standards, a trade secret includes any information that derives independent economic value from not being generally known and

Interpreting the Venture Capital Term Sheet: Economics and Control The term sheet is often mistaken as a simple summary, but it is a negotiated roadmap that determines both the economics and governance of your company for years. As an attorney and CPA, I advise clients to treat each clause as a binding expectation, even when

Understanding Debt Forgiveness in Real Estate Workouts Debt forgiveness in real estate workouts can be a complex and multifaceted issue, often misunderstood by property owners. When a lender forgives a portion of a borrower’s debt, it is not merely a financial relief; it also carries significant tax implications. These implications can affect an individual’s or

Understanding Cooperative Business Structures Cooperative business structures, often simply referred to as cooperatives, are unique entities that prioritize the needs and goals of their members over profit maximization. These structures are owned and operated by a group of individuals for their mutual benefit. While cooperatives can take various forms, including worker cooperatives, consumer cooperatives, and

Understanding the Concept of Waterfall Distributions In the realm of real estate funds, the term waterfall distribution refers to the structured process by which profits are allocated among investors. This concept is crucial for both fund managers and investors to understand, as it dictates the order and manner in which returns are distributed. The complexity

Understanding the Importance of a Corporate Amnesty Program for Whistleblowers Implementing a corporate amnesty program for whistleblowers is a complex yet crucial initiative for any organization aiming to foster transparency and accountability. Such programs are designed to encourage employees to report unethical or illegal activities without fear of retaliation. The intricate nature of designing these

Understanding the Importance of Pre-Immigration Tax Planning Pre-immigration tax planning is an essential process for individuals considering relocation to the United States. This process involves a comprehensive evaluation of one’s financial and tax situation before making the move. The complexity of U.S. tax laws, combined with the unique financial circumstances of each individual, necessitates a