Q: I am interested in giving my employees some kind of employee ownership. What do you recommend?
A: While I cannot recommend or give out legal advice via newsletter, one item of interest would be an employee stock ownership plan or an ESOP. In an ESOP, the owner of the company can carefully craft ownership limits and details for their employees. Once the employee resigns, employee is compensated for their shares and the shares can then again be resold to another.
Q: Once again we face the peril of capital gains tax rates and estate tax burdens rising. What is a good game plan to follow?
A: We have faced the possibility of increased tax rates form year to year in the past. My opinion is that the estate tax will not be a factor as the exemptions will be increased from time to time. The capital gains and dividends tax, historically, has fluctuated form time to time as well. If one is thinking about selling their business, 2012 is not a bad time to do it because of the low capital gains rate. However, retirement and family needs must be observed as well.
Q: I am thinking about making purchases of large equipment. How much may I deduct immediately under Section 179 in the year 2012?
A: The Section 179 deduction, in 2012 is $139,000. No news has been announced of a push in Congress to raise the limit for this year.
By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors