This article discusses when the sale
of goodwill related to a C corporation is the sale of a shareholder’s personal goodwill
and the reasons the gain from the sale of personal goodwill should not be subject to
the net investment income tax.
Earnings-stripping strategies can be an effective way to repatriate earnings at little or
no tax cost; however, taxpayers must be aware of the rules under Sec. 163(j).
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
