The Cummings & Cummings Law Journal

Functional Currency Versus the U.S. Dollar: Why the Choice Matters for a Foreign Subsidiary A foreign subsidiary’s functional currency drives how it computes income, measures gains and losses, and reports results for U.S. tax purposes. Under Section 985 and related regulations, a taxpayer’s qualified business units (QBUs) must determine and consistently apply a functional currency,

Understanding the Corporate Secretary’s Legal Mandate The corporate secretary occupies a legally consequential position that blends governance oversight, statutory compliance, and meticulous recordkeeping. Contrary to the common perception that the role is purely administrative, the corporate secretary is often the officer primarily responsible for maintaining the company’s legal posture, ensuring procedural compliance with state corporate

Define the Concept: What a Qualified Joint Venture Actually Is A Qualified Joint Venture (QJV) is an election under Internal Revenue Code Section 761(f) that allows a married couple who jointly own and materially participate in an unincorporated trade or business to be treated as two separate sole proprietors for federal income tax purposes. In

  On September 1, 2025, significant changes to the Texas Business & Commerce Code will take effect, broadening the scope of the state’s “telephone solicitation” laws. For the first time, the statute will explicitly cover text messages, graphic transmissions, and images, not just traditional phone calls. For small business owners, this expansion has created uncertainty.

Understanding Why Different Fiscal Year-Ends Complicate S Corporation Combinations When two S corporations contemplate a merger and the entities maintain different fiscal year-ends, the tax implications become materially more complex than most owners anticipate. S corporations are pass-through entities that generally must use a calendar year unless they qualify for a specific exception. Consequently, a

Understanding Grantor Trusts: The Foundation of Sophisticated Tax Planning A grantor trust is a trust in which the person who establishes the trust, known as the grantor, retains certain powers or benefits that cause the trust’s income to be taxed to the grantor under Internal Revenue Code Sections 671 through 679. This is a counterintuitive

Our firm has been inundated with requests for clarity regarding the so-called One Big Beautiful Bill Act (“OBBBA”) signed into law by President Trump on July 4th, 2025, and employee benefits and executive compensation professionals are busy planning for application of the new tax provisions which will impact the programs they support. Below are a

Understanding Outside Basis Versus Capital Account Outside basis is the partner-level tax basis in the partnership interest, whereas a capital account is a book concept maintained under Section 704(b) and the partnership agreement. Confusing the two creates costly errors. A partner’s outside basis starts with contributed cash and the adjusted basis of contributed property, then

Estate Equalization Is More Than Simple Fairness When families discuss who will receive what after a parent’s death, most people assume that “equal” means “fair.” In practice, estate equalization is a complex, technical process that must account for asset type, liquidity, tax attributes, beneficiary needs, and long-term family dynamics. As an attorney and CPA, I

Why Estate Tax Planning Demands Urgent Attention for High-Net-Worth Families For high-net-worth individuals, the federal and state estate tax regimes impose a complex overlay of rules that can erode wealth if not managed proactively. The federal estate tax exemption, historically a moving target, is scheduled to decrease after 2025, magnifying the urgency of strategic action.

Understanding “Trading While Insolvent” and Why It Matters Trading while insolvent refers to a company continuing to incur debts or conduct ordinary business when it is unable to pay its debts as they fall due, or where its liabilities exceed its assets on a proper valuation. In many jurisdictions, directors face personal exposure if they

Originally written by Lisa A. Cummings, Esq. and republished with permission. Individuals going through a divorce will usually find their 401(k) or pension plan account must be divided with their ex-spouse. Below are some of the most important mistakes individuals should avoid when preparing a Qualified Domestic Relations Order (QDRO).  Federal law requires a QDRO

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