Tax Planning

Tax planning is the discipline of structuring transactions both large and small in a way to take advantage of favorable tax treatment under the federal and state tax laws. For example, tax planning comes into play in deciding whether to purchase or lease a commercial building or a piece of equipment in the name of the client’s business or to form a separate entity to purchase it and have that new entity lease the building or equipment to the principal business. Disposing of major assets is another example of how tax planning may save a client money. Often, unnecessary taxes are incurred when real property is sold when a tax-free exchange would have been possible and feasible and would have delayed the tax on the gain from the sale for years into the future. Obviously, the ways tax planning can minimize the tax consequences to businesses and to individuals entering into transactions can be as varied as the types of transactions undertaken and the tax code itself. So, the next time you contemplate entering into a business investment or personal transaction, consider discussing it with a Stefani & Stefani attorney during the planning stage.