Masonry Magazine February 1992 Page. 52
TAX MATTERS
Is Your Business Transfer
Plan Bogged Down?
If so, here's the prescription recommended for every owner afflicted with this debilitating disease-taking it will make the disease disappear, almost overnight.
FOR YEARS, I've joked that the words "transferring a family business" and "procrastination" are synonymous. Dozens of business owners have told me, "I've been working on my estate transfer plan for years."
But after spending most of my professional life helping closely held business owners transfer their businesses, it has become painfully clear that one particular reason is usually responsible for the procrastination. What is the reason? Indecision! Yes, this prosperous, decision making owner, who has built a successful business by making the right decisions in a timely manner is frozen with indecision.
Why?... He can't get his questions answered. Here are the most common questions I hear year after year: Do I sell to the kids? Should I give them the business? Who keeps control while I'm alive? After I die? How much will the IRS get? How will the IRS value my business? How can my spouse and I be assured a guaranteed income flow?
Why are such simple questions so hard to answer? Simply put, the answers are different for different businesses and different owners who have different family situations and, most of all, different objectives. Here's a fact that almost every business owner with a transfer problem finds exciting: When the owner gets the answers to his specific questions, the transfer procrastination disease seems to disappear. Overnight!
Here's the prescription I recommend for every owner afflicted with this debilitating disease: Write down your questions in an organized manner. Divide the questions into three categories based on how the answers will affect (1) you. (2) your business. and (3) each member of your family.
Of course, some questions will overlap into more than one category. That's okay. Include all questions you have about income, gift, and estate taxes. Remember, this is not an exercise in estate planning. You ain't dead
By IRVING L. BLACKMAN
Partner, Blackman Kallick Bartelstein
yet. So most of your questions should concern lifetime planning. Dont' worry about the answers. Your job is to ask the questions.
Once you have your questions in hand, bring them to a competent transfer specialist consultant. Two wonderful things will happen after your questions are answered and your transfer plan is in place: Not only will you feel better, but you, your business and your family will remain rich, instead of the IRS.
The Search For Excellence-
The Right Tax Help
Questions. Questions. Seems as if readers of this column keep on writing and calling with all kinds of questions. Most calls can be summarized in one word "Help!"
The tax questions seem to stay the same year in and year out. Most calls come from the successful owner of a closely held business. What questions are asked the most?... How to take money out of his corporation, how to transfer his business to the next generation, how to structure the purchase or sale of a business, and how to avoid estate taxes. Also, questions involving business valuation, travel and entertainment and S corporations are very popular.
Usually, the questions are answered in a short conversation, but sometimes an in-depth tax consultation with me or my staff is required. By the way, the most urgent and usually confused caller is a taxpayer involved in a divorce.
But what do you think is the most common question? Hands down, it is, "Where can I get tax help?" The caller wants to know where he can find someone who can solve his immediate or continuing tax problems. Most of the time a CPA specializing in taxes is your answer, although sometimes a tax lawyer, or both, are needed. This is usually the approach we recommend to the caller: Ask your banker, CPA (for a lawyer), lawyer (for a CPA), insurance agent or other professional to make a recommendation. Your trade association and local business friends are good sources, too. Or call your state bar association and/or your state CPA society. Get at least two referrals. If your community is small, extend your search to larger cities. In general, your best bet is an experienced practitioner whose professional practice has grown over the years. The size or location of the firm is rarely important; expertise in the area of your problem is critical.
Interview all candidates. Select only someone you would recommend to your most important business contact and who you would be proud to introduce as your tax specialist. If you don't find the right person in the initial group, start again.
Yes, cost is important. But chances are, you don't sell a second rate service. Nor do you ask second rate prices. If you are running a first class operation, you're in the big leagues. Hire only the best. Nevertheless, ask in advance how you will be charged. If the projected tax savings don't far exceed the estimated cost, you either don't have a severe tax problem or you are about to select the wrong professional.