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Structuring Ownership Handout
Free cpece webinars
Business Opportunity, Substance Over Form, & Unincorporated Entity as an S Corp


Cost Free
Presentation Length 1.5 hours

Recorded DateJuly 12, 2021
CPE:Not available
(archived webinars do not offer CPE credits)
Subject AreaTaxes
Course LevelAdvanced
Course Description

This trifecta of topics—Business Opportunities, Taxpayer Asserts Substance over Form, and Unincorporated Entity as S Corporation—is drawn from Steve Gorin’s first quarter 2021 newsletter. The webinar will discuss gifts of services and business opportunities in light of developments in capital markets, describe a 2021 case of a taxpayer who recast a transaction to enhance its tax benefits and selected tax issues when a business is formed, and evaluate the use of LLCs and limited partnerships as S corporations, including when that use overlooks potential estate planning traps.


The gift tax applies to transfers of property, not services. Yet, services can generate valuable property rights. When do performing services and providing business opportunities avoid gift tax, and when do they create property rights deemed transferred in a taxable gift transaction? We will explore this continuum and how developments in capital markets sharpen this discussion. In a 2021 case, a partnership selling its business wanted to control the allocation of gain, and the corporate buyer sought tax benefits from buying the assets but did not document the transaction in the best way. The Tax Court discussed the standards for disavowing form, which have implications for business transactions and estate planning (invoking Code §2036 to get a basis step-up).

We will review not only that case but also selected recent developments in the taxation of business formation. Recent years have seen an increase in letter rulings when LLC and limited partnerships make S elections but have not stripped partnership provisions from their governing documents. We will briefly review various recent developments relating to S corporations, then turn our attention to estate planning concerns. Although the Strangi-Bongard-Powell line has not been applied to entities organized as corporations under state law, what about unincorporated entities that make an S election, in light of Pierre?
Learning Objectives:

  • Identify gifts of services and taxation of related employee benefits

  • Determine gifts of business opportunities

  • Report developments in capital markets that sharpen the discussion

  • Identify when a taxpayer may disavow form

  • Express practical applications of disavowing form

  • Recognize tax issues on business formation

  • Identify unincorporated entities making S elections or owning S stock

  • Recall S corporation recent developments

  • Give examples of using an S corporation to avoid Code §2036 and estate planning implications of unincorporated entities making S elections

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Thompson coburn llp

Steve has drafted trusts and a full range of estate planning documents for clients to help grow, preserve, and transmit their family wealth. He has also prepared organizational documents for limited liability companies, corporations, and partnerships to implement their owners' wishes regarding current and future control and transmission, including bringing in new owners and facilitating exit strategies. 
Steve enjoys helping clients structure their affairs to achieve their personal, business, and financial goals while reducing the drag that taxes imposed on them. His firm provides full service to businesses; however, he also acts as counsel on specialized matters while cooperating and facilitating the continued involvement of an existing legal, accounting, and financial services team. Steve maintains his CPA license but prefers to refer income tax returns to practicing CPAs.

Steve Gorin is the former president and an ongoing contributor to Covenant Place’s strategic initiatives. It is a senior affordable housing community with a groundbreaking model for integrated residents with the surrounding community and facilitating holistic services to enrich their lives. 
To know more about Steve Gorin, kindly click on the link below:
For various free resources Steve offers, see

About Our Presenter

Thompson coburn llp

For approximately 90 years, Thompson Coburn LLP has provided the quality legal services and counsel our clients demand to achieve their most critical business goals. Whether helping with a tax, estate planning, real estate or employment issue, navigating a complex acquisition or defending a product or service in litigation, we have the knowledge and resources to meet any legal need.

With over 380 attorneys, we have experience in more than 50 areas of the law. Supported by our firm's state-of-the-art technology, lawyers in our Chicago, Dallas, New York, Los Angeles, Southern Illinois, St. Louis and Washington, D.C. offices enjoy a nationwide practice.