The Cummings & Cummings Law Journal

Understanding What a Publicly Traded Partnership Is and Why It Matters for Taxes A publicly traded partnership (PTP), often referred to as a master limited partnership (MLP), is a partnership that trades on national exchanges yet generally retains pass-through tax treatment. Unlike a corporation that issues a Form 1099-DIV and pays entity-level tax (unless it

Inbound vs. Outbound Transactions: Why the Distinction Drives Tax Outcomes In international tax, the difference between inbound transactions and outbound transactions is not merely semantic; it is the organizing principle that determines who is taxed, on what income, when, and at what rate. Broadly, inbound transactions involve non‑U.S. persons investing in or doing business in

Understanding “Related Party” Status Under Federal Tax Law Before drafting a lease between entities you control, it is essential to determine whether the parties are “related” under federal tax law. The rules do not rely on a common-sense notion of control. Instead, the Internal Revenue Code (IRC) and its regulations employ multiple overlapping attribution and

Real estate syndication rewards meticulous structuring, and a limited partnership is often the backbone of that structure. When the paperwork is clear, taxes are anticipated, and responsibilities are divided, the result is greater investor confidence and defensible outcomes under audit or litigation. Conversely, casual drafting or “off-the-shelf” templates can misalign economics, invite securities or tax

Understanding What Constitutes a Corporate Endorsement of a Negotiable Instrument A corporate endorsement, sometimes spelled “indorsement” under the Uniform Commercial Code, is far more than a quick signature or a rubber stamp on the back of a check. In legal terms, an endorsement is a signature made on an instrument for the purpose of negotiating

What Constitutes a Complete Liquidation of an S Corporation A complete liquidation of an S corporation is not merely a cease in operations or a final dividend. It is a formal process in which the corporation winds up its affairs, settles liabilities, and distributes all remaining property to its shareholders with the intent to terminate

Why Email Communications Qualify as Business Records Email is not casual correspondence in the eyes of the law. It is, in many circumstances, a business record that documents negotiations, approvals, orders, contracts, tax positions, and compliance activities. Courts frequently treat emails as contemporaneous writings that reflect the ordinary course of business, and regulators expect companies

What a “Waterfall” Really Is in a Private Equity Fund In private equity, a waterfall is the contractual sequence that governs how cash and securities are distributed among investors and the fund sponsor after portfolio realizations. It is not a single formula, but rather a series of accounting and economic rules layered together: capital return

Understanding the Rents, Issues, and Profits Clause: Definition and Purpose The Rents, Issues, and Profits clause is a standard provision in commercial and multifamily mortgage documents that grants the lender an interest in the income generated by the real property. At its core, this clause allows a lender to capture cash flow derived from the

Distressed Debt Fundamentals: What You Are Really Buying Distressed debt refers to credit instruments trading at a substantial discount to par due to issuer-specific financial stress, market dislocation, or structural subordination. In practical terms, an investor is purchasing a combination of legal rights: contract claims to principal and interest, remedies upon default, and negotiation leverage

What Restrictive Covenant Agreements Are in Mergers and Acquisitions Restrictive covenant agreements in M&A transactions are contractual promises designed to protect the value of the business being acquired. They typically include a combination of non-compete, non-solicitation, confidentiality, non-disparagement, no-hire, and invention assignment covenants. Although these covenants often appear as standard provisions tucked into a purchase

Understanding What a Non-Grantor Irrevocable Trust Is and Why It Matters A non-grantor irrevocable trust is a fiduciary structure that, when carefully drafted and administered, stands as a separate taxpayer under federal and state law. Unlike a grantor trust, where the creator of the trust (the grantor) is treated as the owner of the trust

Understanding Who Is a “Farmer” for Federal Tax Purposes As an attorney and CPA working with agricultural clients, I begin many engagements by clarifying what it means to be a “farmer” for federal tax purposes. Many individuals assume that selling crops, raising cattle, or operating a small orchard automatically makes them “farmers.” However, the Internal

Why Worker Classification Matters More Than Ever Worker classification is not a mere paperwork choice between issuing a Form W-2 or Form 1099. It is a multi-dimensional legal determination that turns on whether, in substance, a worker is economically dependent on a putative employer or is truly in business for himself or herself. In wage-and-hour

Understanding the Strategic Opportunity in Converting a Rental to a Principal Residence Converting a rental property into your principal residence can unlock meaningful tax benefits, but those benefits arise under a patchwork of statutes and regulations that require precise timing, careful documentation, and disciplined reporting. The most well-known advantage is the potential use of the

Understanding the Role of Non-U.S. Trusts in Asset Protection Non-U.S. trusts occupy a distinct position in cross-border asset protection planning, combining private law trust principles with jurisdictional advantages not available domestically. The primary objective is to interpose a legally recognized fiduciary relationship, under the law of a reputable foreign jurisdiction, between assets and potential claimants.

The New Tax Nexus Landscape for Remote Work Remote work has reshaped corporate and individual tax exposure by shifting where work is actually performed, which can create or intensify state tax nexus. Nexus can be triggered by a single employee working from home in a state where the employer previously had no physical footprint. This

The Federal and State Framework Governing Employee Arbitration Agreements Employee arbitration agreements sit at the intersection of federal and state law. At the federal level, the Federal Arbitration Act imposes a strong policy favoring arbitration, but it does not automatically validate every clause an employer drafts. State contract principles govern formation, defenses, and interpretation, and

Why a Business Associate Agreement Is Not Optional Under HIPAA For any covered entity or business associate that handles protected health information, a Business Associate Agreement is not a mere formality. It is a binding contract that implements specific regulatory requirements under the HIPAA Privacy, Security, and Breach Notification Rules and the HITECH Act. In

Goodwill impairment under ASC 350 is frequently misunderstood as a simple valuation exercise. In reality, it is a multi-stage legal, accounting, and valuation analysis that must be anchored in rigorous documentation, robust internal controls, and defensible assumptions. A misstep at any point can have cascading effects on financial statements, debt covenant compliance, and management credibility