Family Businesses Can Benefit from Gift Tax Exemption Limit

12:09 pm Uncategorized

20211ddpavu2pg5 e1304104072327 Family Businesses Can Benefit from Gift Tax Exemption LimitThe 2010 tax law included a provision for a $5 million gift tax exemption over the next two years that creates an opportunity for owners of family businesses to possibly pass on a large stake in the business to succeeding generations.

This opportunity also brings with it the necessity for business owners to give attention to business succession issues and how to pass the wealth without jeopardizing their own retirement future.

For owners that plan to remain active in the business over the next few years and need ways to generate retirement income, a recent Wall Street Journal article listed several available options:

  • Companies with Simple IRA retirement plans can upgrade to a 401(k) to receive company matches;
  • If the company currently leases its building, consider purchasing the building and renting it back to the company;
  • Create a profit-sharing or pension plan;
  • Remain working as a salaried employee or consultant;
  • Set up a salary continuation plan;
  • Sell company shares to a defective trust for the benefit of children or grandchildren.

If you are a California business owner and need advice on asset protection and business planning strategies, contact our Orange County asset protection law firm.

Contact us today for individualized planning strategies to meet your unique needs.

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