Shifting business opportunities: An incredible strategy to shift wealth and income to other family members if you have or create the right facts.

By Richard M. Morgan

The 2014 U.S. Tax Court case, Bross Trucking v Commissioner, illustrates the type of facts needed to shift business opportunities that would otherwise go to an existing business entity. In this case, a trucking company was in trouble with various federal regulatory agencies and wanted to have the business continue under the sons’ indirect ownership, actually Roth IRAs set up by the sons.  This is an excellent example of how to do this properly, with one exception. The one area of great concern to me was the shifting of the business opportunities to Roth IRA accounts.  Before anyone uses IRAs of any type to operate a business, directly or indirectly, you should take a deep breath and get a lot of legal help and then figure if it is worth all the restrictions. This is a hornet’s nest of complexity and possible tax penalties. Otherwise, it was a beautiful transaction to consider in planning future transactions.

To read an excellent article on this case by Jim Weller writing in the Leimberg Services, Inc. Newsletter dated August 11, 2014 click below.

Jim Weller on Bross Trucking v. Commissioner: Tax Court Finds No Distribution of Appreciated Intangible Assets


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