BW INSIGHTS

SECTION 1202 GAIN EXCLUSION IN SALES TO ESOPS

By Drew D. Larson & Cynthia Boyle Lande | 11.11.2024

ESOPs provide many tax advantages for both sellers and the ESOP-owned company. In addition to all of the ESOP-specific benefits, sales to ESOPs can also potentially qualify for gain exclusion under Section 1202 of the Internal Revenue Code. Benefits of Section 1202 Section 1202 provides significant tax benefits for sellers of qualified small... Read More

Navigating ESOP Distributions: Method, Form, and Policy

By Cynthia Boyle Lande, Drew D. Larson & Sarah E. Herz | 10.22.2024

Understanding ESOP (Employee Stock Ownership Plan) distribution requirements are crucial for compliant operation of your ESOP and managing distribution and repurchase obligations. ESOP plan designs and distribution terms can vary significantly, but all ESOPs are subject to the Employee Retirement Income Security Act (ERISA) and tax rules. In this... Read More

ESOP SELLER PERSPECTIVES – UNDERSTANDING SECTION 1042 IN ESOP SALES

By Cynthia Boyle Lande & Drew D. Larson | 10.10.2024

Understanding Section 1042: A Tax-Efficient Strategy for ESOP Sales In the realm of Employee Stock Ownership Plans (ESOPs), Section 1042 of the Internal Revenue Code offers a significant tax advantage for business owners looking to sell their company to an ESOP. This provision allows for the deferral of capital gains taxes upon the sale of... Read More

IRS Issues Guidance on Matching Contributions for Student Loan Payments

By Maggie Simonson Schild & Cynthia Boyle Lande | 09.16.2024

Background On August 19, 2024, the IRS issued Notice 2024-63 (the “Notice”) to provide highly anticipated interim guidance on Section 110 of Secure 2.0 Act (“Secure 2.0”), which was enacted in 2022. Secure 2.0 amended the definition of matching contributions to allow an employer to make matching contributions beginning in 2024 to 401(k), 403(b),... Read More

Questions about the Property Tax Sale

By Katie McKain Tegtmeier | 08.12.2024

What is a Tax Sale? Tax sales are used by the County Treasurer to collect unpaid and delinquent real estate taxes. The tax sale is generally held on the third Monday of June every year. At the sale, the County Treasurer offers for sale each parcel with delinquent taxes for the total amount of taxes, interest, fees, and costs due against each... Read More

IRS Announces Guidance on Basis-Shifting Transactions by Related-Party Partnerships

By Maggie Simonson Schild & Christopher L. Nuss | 07.25.2024

On June 17, 2024, the Internal Revenue Service (IRS) and Treasury announced new guidance aiming to curtail abusive basis-shifting transactions by related-party partnerships. The Treasury and IRS plan to propose regulations targeting transactions in which partners shift basis from one asset to another, thereby increasing the second asset’s basis... Read More

Iowa Livestock Capital Gain Deduction for 2023

By Maggie Simonson Schild & Christopher L. Nuss | 06.18.2024

On May 15, 2024, Governor Reynolds signed into law House File 2649 that provides an Iowa individual income tax deduction for capital gains incurred on the sale of certain livestock. The Iowa livestock capital gain deduction is available retroactively for tax years beginning on or after January 1, 2023. To claim the livestock capital gain... Read More

Tax Relief Due to Recent Severe Weather in Iowa

By Maggie Simonson Schild & Christopher L. Nuss | 06.18.2024

Severe weather has been active across the state of Iowa, affecting individuals and businesses. Governor Reynolds and the Internal Revenue Service have implemented various forms of tax relief for those most affected by severe weather. Iowa Penalty Relief On May 21, 2024, Governor Reynolds issued a Proclamation of Disaster Emergency for the... Read More

Major Economic Growth Attraction (MEGA) Program Passes Iowa Legislation

By Rebekah Jalilian-Nosraty | 04.17.2024

Businesses are invited to invest in Iowa by Iowa Legislators. The Major Economic Growth Attraction program (MEGA program) passed yesterday (4/16) with a vote of 47 yeas and 0 nays . The program offers tax incentives for businesses making capital investments and creating jobs in Iowa. Qualified businesses may receive a tax credit for withholding... Read More

Employee Retention Credit Withdrawal Process and Voluntary Disclosure Program

By BrownWinick | 12.21.2023

The Employee Retention Credit (the “ERC”) is a refundable tax credit against payroll taxes that was created under the CARES Act to help employers and employees affected by the COVID-19 pandemic by encouraging employers to keep employees. In short, the ERC could be claimed if there was a significant decline in gross receipts over certain periods, a... Read More