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The Supreme Court Blows Up a Popular Small Business Succession Plan

Wayne Rivers
By Wayne Rivers
8 minutes

The Wall Street Journal detailed a mildly shocking Supreme Court decision in its July 12 edition. It seems that a small business somehow violated an arcane life insurance rule which caused its buy-sell agreement to trigger an unanticipated and unwelcome $900,000 tax! This could be very bad news for contractors who have stock redemption buy-sell agreements!

Please tune in this week as Wayne briefly outlines the facts of the case and opines on what trap the small business owners may have inadvertently triggered. Bottom line: for contractors with buy-sell agreements (and that is most of you!), it’s time to convene your advisors and take a look at what you have in place in order to avoid some potentially nasty tax surprises down the road. Wayne offers a couple of pathways your advisors may utilize to prevent running afoul of the rules.

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