Simply Tax Episode 64: Inside the Lender Management Decision

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Simply Tax Episode 64: Inside the Lender Management Decision

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Many have been buzzing about Lender Management, LLC v. Commissioner (T.C. Memo 2017-246) since it was decided in December 2017, only days before the enactment of the Tax Cuts and Jobs Act (TCJA), which we’ve talked so much about. Guest John Hackney—one of three attorneys representing Lender Management, LLC in the case before the United States Tax Court—joins host Damien Martin for an insightful discussion on key aspects of the case and possible planning strategies now that we’re about 18 months in.

TIME STAMPS OF WHAT’S COVERED

  • About John Hackney @1:30
  • Why the Lender Management decision is significant @3:03
  • The distinction between an IRC §162 trade or business and §212 investment activity @5:24
  • Importance of good, well-documented facts @7:23
  • What it takes to rise to the level of a §162 trade or business @8:04
  • How Lender Management, LLC overcame an argument that it was managing the investments of the Lender family @9:58
  • Compensation through a profits interest is a key component in the structure @12:50
  • Registration requirements under securities laws @16:06
  • What John is seeing and hearing after the decision @17:18
  • How the TCJA increased interest in the Lender Management decision @19:11
  • Are many family offices organizing or restructuring in light of the decision? @19:58
  • How to evaluate a Lender Management, LLC-type structure @21:16

BIO FOR GUEST

John Hackney is a shareholder at Chamberlain Hrdlicka Attorneys at Law in Atlanta, Georgia, where he represents clients in disputes with the IRS and other taxing authorities. John has extensive experience in the tax arena that precedes his law practice. He has a master’s degree in accounting with a tax concentration. Prior to attending law school he worked as a CPA for PwC in its tax department where he focused on compliance work for a large private equity client and individuals.

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ADDITIONAL RESOURCES MENTIONED IN THE EPISODE

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