High Net Worth Family Tax Report, Vol. 17, Issue 1

Welcome back to Loeb & Loeb’s High Net Worth Family Tax Report, bringing you in-depth articles highlighting important topics and providing practical insights for high net worth individuals, with a focus on trusts and estates, tax, family offices and tax-exempt organizations. 

In this issue, partner Todd Steinberg and senior counsel Jennifer M. Smith explain why owners of closely held businesses should review their buy-sell planning in light of the recent decision in Connelly v. U.S., in which the U.S. Supreme Court held that the use of life insurance proceeds received by a closely held company to redeem a deceased shareholder’s interests increased the value of the company and, consequently, the estate tax value of that deceased shareholder’s interests. 

Given the increasing popularity of professional sports and growth in the sports industry, partners Brian R. Socolow and Ronelle C. Porter and associate Evan Saunders discuss the unique world of sports investing and the issues potential investors should consider before investing in a sports team or franchise. 

In our Family Office Corner, featuring insights on topics of interest to our family office clients, partner Kimberly Eney explores the rapidly expanding area of “impact investing” by family foundations, including the tools available to family foundations contemplating an impact investing program and the associated tax law benefits and considerations. 

In other aspects of charitable planning, knowing the tax (or tax-exempt) status and public charity classification of an organization is crucial when selecting grantees to receive charitable funds from a private foundation, distributions from a donor-advised fund or tax-deductible charitable contributions from individuals. Partner Diara M. Holmes reviews various options for checking a charity’s status and accessing other information on charities that may be useful to foundations, donor-advised funds and donors in selecting their charitable recipients. 

Finally, in case you missed it, partner Alyse N. Pelavin and senior counsel Christina Hammervold summarize the reporting requirements now in effect that require most entities to report beneficial ownership information to the U.S. government, in their alert “New Beneficial Ownership Reporting Requirements Affecting LLCs and Other Entities Are Now in Effect.”

In This Issue: 

• Supreme Court Rules on Estate Tax Consequences of Buy-Sell Arrangement
• Investing in a Sports Franchise: Key Considerations for Stepping Into the Game
• Family Office Corner: Family Foundations, Impact Investing and the Tax Laws
• Charitable Planning—How to Check Tax-Exempt Status

Supreme Court Rules on Estate Tax Consequences of Buy-Sell Arrangement

Over the summer, the U.S. Supreme Court decided that life insurance proceeds received by a closely held company and earmarked to redeem a deceased shareholder’s interests increased the value of the company and the shareholder’s interests for estate tax purposes. This decision directly affects how closely held business owners should structure their business succession and estate tax plans, particularly for family-owned businesses. Read more here.

Investing in a Sports Franchise: Key Considerations for Stepping Into the Game

Investing in a professional sports franchise is not merely a financial transaction—it is an invitation to join an exclusive club, feel the thrill of competition from a very different seat and leave a lasting legacy that touches the hearts and souls of fans. There are some essential considerations for investors contemplating this exciting venture. Read more here.

Family Office Corner: Family Foundations, Impact Investing and the Tax Laws

While family foundations commonly advance their charitable missions through their grant-making, many are exploring how to make a similar impact through investments. Family foundations are embracing this new landscape, and the federal tax laws provide quite a bit of flexibility for them to engage, particularly with respect to so-called program-related investments. There are several tools available to family foundations contemplating impact investments and the associated tax law considerations. Read more here.

Charitable Planning—How to Check Tax-Exempt Status

Knowing the tax (or tax-exempt) status and public charity classification of an organization is crucial when selecting grantees to receive charitable funds from a private foundation, distributions from a donor-advised fund or tax-deductible charitable contributions from individuals. There are ways to check a charity’s status. Read more here.

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