This course discusses how to preserve income tax benefits from estate tax audits and selected issues relating to S corporation sales and partnership redemptions.

The discussion around preserving income tax benefits from estate tax audits begins with coordinating estate tax and income tax statute of limitations and will include a recent case in which the taxpayer failed to take the steps necessary to preserve rights to income tax benefits and therefore lost them.

The discussion around the sale of S corporations begins with a brief overview of recent IRS relief from various mistakes to avoid needing a private letter ruling before a sale. Next, we will review tools to avoid a gain on the sale of a business and coordinate this with the buyer’s desire to get a basic step-up in the business’ assets. We briefly compare state income issues on the sale of business interests with the sale of business assets and will discuss recent cases. Next, we review the deferred sales trust and the relatively recent chief counsel advice regarding that tool.

Finally, we discuss partnership redemptions. We will review the flexibility afforded them and compare them with installment sales. This webinar will conclude with a surprising case where exiting partnerships had to recognize ordinary income when they exited wrongfully and took clients with them.

Learning Objectives:

• Evaluate how to preserve income tax benefits in anticipation of estate tax audit


• Recognize how to fix S corporation mistakes


• Identify installment sale advantages and disadvantages, including deferred sales trusts


• Compare installment sales to partnership redemptions


• Recognize why a recent case triggered ordinary income when departing partners took clients and how to avoid that result