The Cummings & Cummings Law Journal

Begin With a Clear Tax Map: What “Repatriation” Actually Means Tax-efficient repatriation begins with a precise understanding of what you are moving and why. “Repatriating foreign earnings” is not a monolith. It can involve cash distributions, non-cash dividends, intercompany loan repayments, capital reductions, share redemptions, liquidation proceeds, or even service fee flows. Each pathway has

Understanding Grantor Trusts in Modern Tax Planning Grantor trusts are a cornerstone of sophisticated wealth transfer and income tax planning. Properly structured, a grantor trust allows the grantor to be treated as the owner of trust assets for income tax purposes while still removing those assets from the grantor’s gross estate for estate tax purposes.

Define Strategic Objectives and the Role of a Recapitalization A private equity recapitalization is frequently misunderstood as a mere liquidity event. In practice, it is a strategic reallocation of risk, governance, and future value between founders, management, and a financial sponsor. Before engaging a buyer, articulate what the business and its owners intend to achieve:

Understanding the Baseline: Citizenship, Residency, and Eligibility Under U.S. Corporate Law In most U.S. jurisdictions, there is no per se prohibition on a non-U.S. citizen serving as a director of a corporation. State corporate statutes, including those of Delaware, New York, and California, generally do not impose citizenship or U.S. residency requirements for directors. The

Deferring capital gains on commercial real estate is not a single tactic; it is an integrated tax planning exercise that involves sophisticated structures, strict statutory timelines, and careful coordination among legal, tax, and transactional advisors. As an attorney and CPA, I routinely see investors underestimate elements such as depreciation recapture, state conformity, related-party limitations, and

Understanding the Energy Efficient Commercial Buildings Deduction at a Glance Section 179D provides a potentially substantial deduction for energy efficiency improvements to commercial buildings and certain multifamily buildings that are four stories or taller. While it is often described casually as a simple “per-square-foot write-off,” the statute is intricate and includes technical engineering requirements, wage

What the IRS Hobby Loss Rules Are and Why They Matter The so-called “hobby loss rules” refer to Internal Revenue Code Section 183, which limits deductions for activities not engaged in for profit. If the IRS determines that your activity is a hobby rather than a business, the agency will restrict or disallow losses; this

Scope of the WARN Act and Who It Covers The Worker Adjustment and Retraining Notification (WARN) Act requires many private employers to provide advance written notice before certain workforce reductions. In practice, the statute applies to business enterprises with 100 or more full-time employees, or 100 or more employees whose regular weekly hours in the

Understanding the Reverse Morris Trust and Up-C Combination A Reverse Morris Trust is a complex corporate reorganization technique that allows a parent corporation to divest a business on a tax-deferred basis by combining a tax-free spin-off under Section 355 with a merger of the spun entity into a third party. An Up-C structure involves a

Understanding Which Registrants Must File and Why the Scope Is Broader Than It Appears Under Rule 13p-1 promulgated pursuant to Section 1502 of the Dodd-Frank Act, any issuer that files periodic reports under Sections 13(a) or 15(d) of the Exchange Act must assess whether tin, tantalum, tungsten, or gold (often referred to as 3TG) are

Understanding the Difference Between IRS Subordination and Discharge Taxpayers and even seasoned lenders often conflate subordination, discharge, withdrawal, and release in the context of a federal tax lien. These are distinct legal outcomes with different statutory standards and practical effects. A subordination does not remove the federal tax lien. Rather, it permits a specified creditor’s

Understand What Triggers Broker-Dealer Status Many well-intentioned companies assume a casual “introduction fee” or a one-page finder agreement is benign. In reality, the United States securities laws define broker activity broadly, and seemingly simple referral arrangements can trigger broker-dealer registration requirements under Section 15(a) of the Securities Exchange Act of 1934. You are at higher

Understanding Declaratory Judgment Jurisdiction in Tax Court A petition for declaratory judgment in the United States Tax Court is a specialized proceeding that seeks a judicial declaration regarding a specific tax status or qualification, rather than a determination of a tax deficiency. Unlike a typical deficiency case, which involves a Notice of Deficiency and a

Understanding What Legally Constitutes a Franchise Across Borders Before offering opportunities abroad, it is essential to determine whether your model is legally considered a franchise in the target jurisdiction. Many founders assume they are licensing a brand or providing distribution rights, only to discover that local law treats the arrangement as a franchise because it

Defining a “Signing Bonus” That Vests Over Time: Why Terminology Dictates Legal Outcomes Employers often label inducement payments as a “signing bonus” while staggering payment over time or conditioning payment on continued employment. That label is rarely dispositive. In many jurisdictions, a “bonus” paid for work performed or as consideration for accepting an offer can

Understanding the Section 1042 Roll-Over in ESOP Transactions A Section 1042 roll-over allows certain business owners to sell stock to an Employee Stock Ownership Plan (ESOP) and defer recognition of capital gain by reinvesting the proceeds in qualified replacement property. In plain terms, Congress created a pathway for owners of closely held companies to achieve

What the IRC Section 965 Transition Tax Actually Is IRC Section 965 imposed a one-time tax on certain deferred foreign earnings of specified foreign corporations, generally measured as of the last taxable year of the foreign corporation that began before January 1, 2018. The law effectively required many U.S. shareholders to include accumulated post-1986 earnings

Understanding the Foreign Earned Income Exclusion and Who Qualifies The Foreign Earned Income Exclusion (often referenced as the FEIE) allows a qualifying U.S. citizen or resident alien living abroad to exclude a specified amount of foreign earned income from U.S. taxation each year. The exclusion threshold is adjusted annually for inflation and applies only to

Understanding a “Complete Liquidation” of an S Corporation A complete liquidation of an S corporation is not simply closing the doors and distributing cash. It is a legally significant sequence of steps under the Internal Revenue Code, state corporate law, and often loan covenants and contractual arrangements. For federal tax purposes, a complete liquidation occurs

Understanding the Meaning of “Covered” Versus “Non-Covered” in Healthcare The distinction between “covered” and “non-covered” activities is not a single, universal classification. It is a layered concept that depends on the specific legal regime at issue. For some providers, “covered” refers to services reimbursable by Medicare, Medicaid, or commercial payors, subject to payer contracts and