Keeping an Eye on Asymmetrical Issues and Problems

With many closely-held entities electing (or defaulting into) a “pass-through” status, either as an entity to be treated as an “S corporation” under the Federal tax law, or as a “partnership” under the Federal tax law, or as a “disregarded entity” under the Federal tax law (when there is only one owner, under the facts and circumstances), state laws and the Federal tax law can become asymmetric.  In other words, a LLC formed under state law may elect its way into either C or S corporation entity status under the Federal tax law, or default into treatment as a partnership, with two or more owners, or disregarded as an entity separate from its owner, if there is only one owner under the facts and circumstances.   At other times, a person or entity labeled as an owner (e.g., member, partner, limited partner, or even shareholder) or treated as such under state law, may not be properly classified as such under the Federal tax law’s application of a facts and circumstances approach.  Under these situations, it may be critical for an owner to take affirmative action with regard to any K-1s he or she or it has been issued, applying applications and advice rendered in our special program, Partners in Peril.

Here at the Tufts Law Firm, we are prepared to assist owners with understanding and working with this asymmetry, and either anticipate or avoid or deal with business disputes that may then arise.  If you have asymmetrical issues or concerns, please contact us.

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A wonderful serenity has taken possession of my entire soul, like these sweet mornings of spring which I enjoy with my whole heart. I am alone, and feel the charm of existence in this spot, which was created for the bliss of souls like mine.

I am so happy, my dear friend, so absorbed in the exquisite sense of mere tranquil existence, that I neglect my talents. I should be incapable of drawing a single stroke at the present moment; and yet I feel that I never was a greater artist than now.

When, while the lovely valley teems with vapour around me, and the meridian sun strikes the upper surface of the impenetrable foliage of my trees, and but a few stray gleams steal into the inner sanctuary, I throw myself down among the tall grass by the trickling stream; and, as I lie close to the earth, a thousand unknown plants are noticed by me: when I hear the buzz of the little world among the stalks, and grow familiar with the countless indescribable forms of the insects and flies, then I feel the presence of the Almighty, who formed us in his own image.

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