Baker Tax Blog

You have a brilliant business idea. And you can see yourself as a millionaire. But sadly, you’re frozen by the very first decision you have to make: Do you form the company as an S corp, C corp, or LLC? Today’s your lucky day. I’ll make it easy for you. If you plan on...

When selling an S corporation, an increasingly common transaction structure is the so-called “F” reorg QSub drop. Its popularity is tied to the fact that it can provide each party in the transaction a desired tax benefit. What tax benefit does a buyer want when...

On March 27, 2020, President Trump signed the third – and most comprehensive – coronavirus relief package into law. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was passed by both the House of Representatives and the Senate with broad...

So, you accidentally granted one or more discount stock options. Now what? As quick background, a discount stock option has an exercise price below the fair market value of the underlying stock on the date of grant.[1] For whatever reason, Congress doesn’t like this...

You have an employee who is leaving. She tells you she doesn’t have the cash to exercise her Company stock option in the first three months post-termination and she realizes if she doesn’t the option will expire. She pleads with you to do something and you are willing...

You can tell the difference between equity and non-equity partners at Kirkland & Ellis by looking to see if they have “P.C.” after their name. It’s true. See here for an example of an equity partner and here for an example of a non-equity partner. Still skeptical?...

Let me explain why buying stock with a note can be so amazing. Imagine your employer offers you two alternatives: one million dollars worth of stock, or a stock option giving you the right to buy stock currently worth one million dollars. The stock option right lasts...

On October 23, 2019, the IRS released guidance with respect to the tax treatment of family members that work together in a family business. De Facto Partnership I expect it’s fairly common for a couple to treat a family business, where no entity has been formed, as a...

Mike Baker frequently advises with respect to earnouts. He possesses a breadth and depth of experience in tax and employee benefits & compensation law that spans multiple decades. For additional information, please contact mike@mbakertaxlaw.com.

I can tell you how to make money and pay no tax. “Doubtful,” you think, feeling skeptical and remembering that wise mantra “if it sounds too good to be true, it probably is.” True story: last week I was eating at a Chinese restaurant, opened up my fortune cookie, and...

Running your business as an S corporation has several tax benefits. However, it's hard to raise money in an S corp because you can only have one class of stock and you cannot have entity shareholders. So what do you do when you want traditional investors? One...

Few tax code sections are as technical or punitive as Section 409A. If you get things wrong, you’re staring a 20% penalty in the face… plus acceleration of tax, plus interest, plus an additional 5% penalty if you happen to live in California. But there is good news....