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Discusses the reasons and uses of triangular or three-party mergers to complete a business acquisition or tax-free corporate reorganization.

Employees, officers, and directors of Texas Gulf Sulphur acquired or tipped off others to acquire common stock or options before and concurrent with the announcement of a major discovery of ore. The question is whether any of these acquisitions violated either federal securities law, state fiduciary law, or ethical standards.

During a weekend social event, a company president learns of an attractive investment tenuously connected to his firm's line of business. Is this a corporate opportunity?

Gives prominence to Mr. Justice Holmes' Prediction Theory of the law as a practical--and by analogy to forecasting in finance and other functional areas of business--comfortable, and familiar way for businesspeople to think about the law. Law is defined as a forecast of what the relevant facts proving the presence or absence of those concepts or principles will turn out to be. The basis for the forecast of concepts is a hierarchy of sources beginning with statutes, followed in sequence by an assessment of case precedent and considerations of social advantage.

The Rollins family assembly was meeting to discuss and decide which one or combination from among an estate freeze, installment sale of stock, ESOP (employee stock ownership plan), leveraged capitalization, annual gifts of stock, one-time outright gift of stock, or sale of the business to a third party best accommodates the needs of these people and this company.

A master plan accommodating two retiring brothers, the brother who will remain as president, third-generation family members, employees, philanthropic interests, and company imperatives must be developed by second-generation brothers who are controlling shareholders and senior management team members. This case reviews several estate planning concepts the family implemented and asks the student to formulate an optimal plan for transferring control of the company while reconciling conflicting interests.

The taxpayer purchased land and later transferred it to a family controlled corporation in return for an earn out. When funds were eventually received, the IRS treated them as dividends, whereas the individual and corporate taxpayers contended they were sums paid on the individual taxpayer's sale of a corporate asset to the corporation. The question is whether the original transfer to the corporation was a contribution to capital (equity) or the creation of a debtor/creditor relationship.

An employee is permitted to choose any one of three stock option plans. The first involves options that are in the money and must be exercised within 10 years. The second involves options that are at the money and must be exercised within 10 years. The third involves options that are at the money and must be exercised within 15 years. A wise decision requires students to consider a number of tax and nontax business considerations.

Explores the location of the somewhat imprecise line between debt and equity. Identifies the primary business contexts that give rise to problems, the alternative tax consequences attending the debt versus equity determination, and the most prominent tests used to resolve the questions. Deals with corporate debt paying a market rate of interest and issued at par or close to it.

Distinguishes and explains the basic rules associated with two types of contributions to capital: (1) transfers of property by a government to a company to entice it to take some action such as relocate a plant, and (2) transfers of property to a corporation by existing shareholders without adequate documentation such as the issuance of stock certificates.

Discusses the historical context, purpose, primary mechanical features, and effects of the passive activity loss rules.

Discusses the concept of charitable lead and charitable remainder trusts, some of their mechanics, and typical circumstances in which they are used.

As of early 1998, virtually all U.S. states had adopted legislation permitting the organization of limited liability companies. This note describes this new type of entity and the reason why it has become so popular.

The so called estate freeze is a classic estate planning and recapitalization practice. It seeks to reconcile the multiple human and business considerations associated with transferring operating control and the future increases in the value of a family dominated business from the retiring generation to the next generation of family management. The note describes the various objectives that need to be reconciled, the concept and mechanics of the practice, several areas of abuse that developed, the Treasury's overreaction to those abuses, and the current posture of the law and practice.

The taxpayer sold mining company stocks and was to be paid royalty as ore was extracted from the corporation's mine. Because the factual issues of whether ore would be extracted and, if so, how much and when were so indeterminate, the court held that the contract right to royalty payments could not be valued. There was no "realization." Recognition would be postponed until payments were actually received.

In two cases consolidated for decision, the Court articulates the tests to be used when deciding whether an item is income or a gift and therefore, not income. Both cases are colorful. The first involves the unsolicited receipt of a Cadillac. The second involves transfer by the much photographed Trinity Church which sits at the end of Wall Street.

The U.S. Supreme Court reconsiders two basically inconsistent prior Supreme Court decisions, overrules one and states that illegally acquired income must be reported.

Identifies and discusses the major features of the federal gift and estate tax, plus major nontax implications.

Discusses the theory and rules governing the taxation of business combinations (mergers and acquisitions). Related information from state corporate law, federal securities law, accounting, and finance is also provided. A rewritten version of an earlier note.