Tax
Tax Law Defined®
There are few areas of the law that can affect a business’s bottom line or an individual’s livelihood like federal, state and local tax matters. Our Tax Law Practice Group is armed with decades of hands-on experience in all manner of taxable transactions and tax-saving techniques. Whether counseling taxpayers, corporations or social-sector organizations, we look beyond a simple problem analysis to craft innovative, impactful solutions based on each client’s distinct tax and business situation.
Equally vital, we are committed to keeping clients fully apprised of the ever-changing laws, regulations and judicial decisions that govern our tax system. This combination of insight and attentiveness ensures that our clients pay the correct amount of tax while taking advantage of tax-saving opportunities and retaining amounts that rightfully belong to them.
Practice Area Contacts
Office Member-in-Charge
Louisville, KY
Member
Louisville, KY
Member
Louisville, KY
Member
Louisville, KY
Member
Cincinnati, OH
Member
Louisville, KY
Practice Group Leader
Louisville, KY
Member
Cincinnati, OH
Member
Louisville, KY
Related Services
Our team draws on decades of experience representing both individual taxpayers and Fortune 500 companies in thousands of audits at the revenue agent, protest and administrative levels. Our deep understanding of the IRS’s and other tax authorities’ operating methods enables us to provide the best possible advice to taxpayers facing civil or criminal tax controversies. While our focus is foremost on minimizing our clients’ tax and trial exposure, we recognize that litigation is sometimes unavoidable or in our clients’ best interest. We provide extensive controversy management and trial support services, with the aim of resolving issues at the earliest stage possible.
We assist a variety of domestic and foreign clients in researching, negotiating and documenting economic incentives, local or state income tax credits, enterprise zone districts and low or no-interest loans. Our team is frequently brought on once a project is underway to assist with program compliance or in the event of a default situation or dispute with a governmental agency. By addressing our clients’ immediate tax needs, planning ahead and maintaining persistent contact with local and state agencies, we ensure that businesses have the means to proceed with equipment purchases, hire much-needed personnel and ultimately see their important projects to fruition.
We assist with everything from trade agreements, compliance and controversy issues, to custom duties, expatriate and global income tax, to totalization agreements and the formation of IC-DISCs. Our clients look to us for guidance with respect to navigating the complex, high-risk world of international tax. We help them overcome barriers to commerce and locate avenues for profit and growth.
Our attorneys have a deep understanding of the many tax and compliance-related issues unique to the nonprofit sector. We work with nonprofits, community foundations and other tax-exempt organizations to document, maintain and take full advantage of their tax-exempt status. We also advise on matters of entity and board formation, corporate governance, executive and employee compensation, acquisitions and joint-venture formations. Finally, we pride ourselves on being ahead of the curve with respect to new regulations and incentives. We offer innovative, tax-efficient strategies for keeping costs down while increasing our clients’ organizational impact.
Our attorneys understand, in a comprehensive way, the highly specialized aspects of LLC and S corporation taxation and how these tax implications affect business formation, employee and equity compensation, as well as a host of other planning-related issues. Several of us focus predominantly on partnership tax issues for pass-through entities. We use this knowledge to help clients determine which tax framework is best suited to their business and tax needs. Whether we’re facilitating the formation, operation or sale of a business or investment, we work diligently to ensure that every transaction is properly structured and executed in the most efficient manner possible.
Our team has significant experience assisting with the legal and tax challenges highly regulated businesses face on a routine basis. From providing transactional due diligence, to defending an audit before various state and federal administrative agencies, to litigating complicated tax issues, we deliver solutions based on a detailed accounting of each client’s business, understood within the broader context of their industry. Though we advise on the tax and regulatory overlay for virtually every industry, we have notable depth in the manufacturing, tobacco, alcohol, gaming, energy, banking and auto sectors.
Frost Brown Todd’s State and Local Tax (SALT) practice advises clients on the full gamut of SALT matters at all stages of the tax continuum, providing high quality defense in tax-related litigation, audits and appeals, as well as proven strategies to help clients optimize their specific tax positions. Furthermore, by working collaboratively with attorneys across the entire footprint of the firm, we are able to capitalize on and leverage the firm’s various industry and specialty practices as needed.
Members of our SALT practice are among the most active, sophisticated and regionally preeminent tax professionals in our mid-American footprint. Our state and local tax experience runs deep. We’ve represented thousands of taxpayers at all administrative and judicial levels and in SALT controversies ranging from sales and use tax to real property, tobacco and motor vehicle tax, and all areas in between.
Our attorneys likewise know how tax and revenue departments work from the inside, as members of our team served in governmental positions before entering private practice. With the necessary experience and relationships, we find practical and innovative ways to minimize our clients’ state and local tax exposure and turn the latest developments to their advantage.
Tax Planning
Our attorneys advise on the full spectrum of taxable transactions and tax-saving techniques at the individual and entity levels. Most important, our tax planning advice focuses not just on our clients’ immediate needs but also in anticipation of the likely issues they will face as the business evolves. By being both practical and painstaking, we help clients develop a tax-efficient structure that complies with the law, prevents undue expense and ultimately achieves the desired tax and business outcomes.
Qualified Small Business Stock (QSBS) Services
Under Code Section 1202, taxpayers who are issued founder or investor corporate stock for cash, services, or other property (excluding stock) can potentially exclude at least $10 million of gain at the federal (and often state) level upon the sale of qualified small business stock (QSBS) held by the taxpayer for at least five years. The overarching mission of our QSBS practice encompasses:
- Helping clients navigate through the choice of entity decision, and in particular whether to operate their business through a C corporation and seek eligibility for claiming the Section 1202 gain exclusion.
- Assisting clients in their efforts to meet the eligibility requirements for claiming the Section 1202 gain exclusion.
- Assisting clients in preparing for a potential IRS audit by gathering the information and documentation necessary to establish that they have met each of Section 1202’s eligibility requirements.
Want to learn more about Qualified Small Business Stock? Dive into our QSBS Services Brochure and more resources below.
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Determining the Applicable Section 1202 Exclusion Percentage When Selling Qualified Small Business S...May 13, 2022 | Blogs
When Section 1202 was enacted in 1993, a 50% gain exclusion applicable to the sale of qualified smal...
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Part 1 – Reinvesting QSBS Sales Proceeds on a Pre-tax Basis Under Section 1045
April 19, 2022 | Blogs
Section 1045 allows stockholders to reinvest on a pre-tax basis, proceeds from the sale of qualified...
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Part 2 – Reinvesting QSBS Sales Proceeds on a Pre-tax Basis Under Section 1045
April 19, 2022 | Blogs
Section 1045 allows stockholders to reinvest on a pre-tax basis, proceeds from the sale of qualified...
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Selling QSBS Before Satisfying Section 1202’s Five-Year Holding Period Requirement?
April 19, 2022 | Blogs
A stockholder must hold qualified small business stock (QSBS) for more than five years in order to c...
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How Corporations May Run Afoul of the Accumulated Earnings Tax – A Section 1202 Planning Brief
February 16, 2022 | Blogs
We have discussed in previous articles the potential benefits of operating a start-up as a C corpora...
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Section 1202 Planning: When Might the Assignment of Income Doctrine Apply to a Gift of QSBS?
January 26, 2022 | Blogs
Section 1202 allows taxpayers to exclude gain on the sale of QSBS if all eligibility requirements ar...
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Planning for the Potential Reduction in Section 1202’s Gain Exclusion
November 3, 2021 | Blogs
On September 13, 2021, legislation emerged from the House Ways and Means Committee that included an ...
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Maximizing the Section 1202 Gain Exclusion Amount
October 7, 2021 | Blogs
Planning for an investment home run – increasing the standard Section 1202 $10 million gain exclus...
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A SPAC Merger Primer for Holders of Qualified Small Business Stock
September 30, 2021 | Blogs
The number of private companies electing to go public through a transaction (referred to in this art...
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Transfers “At Death” of Qualified Small Business Stock
September 29, 2021 | Blogs
This article addresses the consequences of “transfers at death” of qualified small business stoc...
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Congress Proposes Legislation Limiting Section 1202’s Gain Exclusion
September 16, 2021 | Blogs
When Congress enacted Section 1202, it noted that the gain exclusion was intended to “encourag...
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Claiming an Ordinary Loss Under Section 1244 for an Investment in a Failed Start-up
September 3, 2021 | Blogs
Congress enacted Section 1202[i] based on the premise that the possibility of a $10 million gain exc...
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The Role of the Business Purpose Doctrine in Transaction Planning Involving Qualified Small Business...
September 3, 2021 | Blogs
This article addresses the importance of having bona fide (non-federal income tax) business and pers...
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Transfer Planning With Qualified Small Business Stock
May 21, 2021 | Blogs
During the past several years, there has been a marked increase across the country in the use of C c...
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New IRS Private Letter Ruling Helps Define the Scope of Proscribed Excluded Activities Under Section...
April 15, 2021 | Blogs
During the past several years, there has been a marked increase across the country in the use of C c...
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Exploring the Benefits of the Corporate Freeze Transaction
March 24, 2021 | Blogs
Synopsis The distribution of a C corporation’s assets to its shareholders often triggers a hea...
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How Section 1202’s $50 Million Aggregate Gross Assets Limitation Works
March 17, 2021 | Blogs
During the past several years, there has been a marked increase across the country in the use of C c...
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Can Convertible Debt or SAFEs Qualify as QSBS for Section 1202’s Gain Exclusion?
February 22, 2021 | Blogs
Only the issuance of “stock” triggers the running of Section 1202’s five-year hold...
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Equity Rollovers in M&A Transactions Involving Section 1202 Qualified Small Business Stock (QSB...
February 19, 2021 | Blogs
Many M&A transactions are structured to include a rollover of some percentage of the target comp...
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Rollover Equity Transactions 2021
January 28, 2021 | Blogs
During the 21st century, financial buyers such as private equity sponsors (PE firms) have dramatical...
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Dealing With the Rollover of the Management Team’s Equity and Equity Rights in a Sale Transact...
January 27, 2021 | Blogs
A typical part of the sale of a business is the rollover of some equity by the target company’...
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Section 1202 Tax Planning: Avoid Losing the Gain Exclusion!
October 26, 2020 | Blogs
Beware of Mixing Section 1202’s Version of Oil and Water – S Corporations and QSBS Our Section 1...
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Section 1202 and S Corporations
September 18, 2020 | Blogs
With the corporate tax rate reduced from 35% to 21%, we have experienced a heightened awareness that...
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Dissecting Section 1202’s “Active Business” and “Qualified Trade or Business...
August 5, 2020 | Blogs
With the corporate federal income tax rate reduced from 35% to 21%, there is a renewed interest in c...
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Recapitalizations Involving Qualified Small Business Stock
May 19, 2020 | Blogs
Navigating through recapitalizations, reorganizations, stock splits, reverse stock splits, tax free ...
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An Introduction to the Use of Blocker Corporations in M&A Transactions
May 8, 2020 | Blogs
In an earlier article titled “Rollover Equity Transactions 2019,” we discussed the vario...
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Private Equity and Venture Capital Fund Investment in Qualified Small Business Stock (QSBS) – A Gu...
February 17, 2020 | Blogs
This article is a guide for investors and fund sponsors who purchase, own and sell qualified small b...
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Advanced Section 1045 Planning
January 17, 2020 | Blogs
This article is one of a series addressing planning issues relating to qualified small business stoc...
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Section 1202 Qualification Checklist and Planning Pointers
November 1, 2019 | Blogs
A basic checklist of qualification requirements to help business owners and tax professionals consid...
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A Taxpayer’s Consumer Guide to “Substantial Authority” Tax Opinions
May 24, 2019 | Blogs
Why are tax opinions especially relevant today? Recent changes in the tax laws have left taxpayers a...
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The Choice of Entity Decision for VC Financed Start-ups
April 3, 2019 | Publications
I recently published an article focusing on the choice of entity decision for main street businesses...
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Revisiting the Choice of Entity Decision for the Closely Held Business
January 2, 2019 | Blogs
During the past year, numerous articles have summarized and analyzed the changes made by the Tax Cut...
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A Roadmap for Obtaining (and not Losing) the Benefits of Section 1202 Stock
August 20, 2018 | Blogs
Under IRC § 1202, 100% of gain on the sale of QSBS acquired after September 27, 2010, is generally ...
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What Service Businesses Qualify for IRC §§ 199A’s or 1202’s Benefits?
March 12, 2018 | Blogs
The 2017 Tax Cuts and Jobs Act (the “2017 Tax Act”) ushered in several benefits for C corporatio...
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Maximizing the IRC § 199A Deduction
February 5, 2018 | Blogs
Taxpayers who qualify for the IRC § 199A deduction (the “Deduction”) will be one of the...
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The 21% Corporate Tax Rate Breathes New Life Into IRC § 1202
January 22, 2018 | Blogs
In the aftermath of the 1986 tax act and the introduction of LLCs, pass-through entities (LLC and S ...
Tax Law Defined® Blog
Featuring everything from legislative updates to judicial trends and tax-saving techniques.
September 23, 2022 | Experience
Frost Brown Todd’s government services team assisted the City of Dublin, OH, with a multi-phase ec...
September 21, 2022 | Experience
Our government services team provides comprehensive support to a wide variety of clients, ranging fr...
May 13, 2022 | Blogs
When Section 1202 was enacted in 1993, a 50% gain exclusion applicable to the sale of qualified smal...
April 29, 2022 | Publications
Background The U.S. Supreme Court delivered a long-overdue victory for local governments and their a...
April 28, 2022 | Blogs
While many software trends come and go, systems integration continues to grow in scope and importanc...
April 26, 2022 | Blogs
Blockchain. Does it protect personal privacy? Is it a tool that can evade the law? How should we thi...