The Advisors Forum Presents
Live CPE Series
Hosted by Peter S. Myers and Bob Keebler
Peter S. Myers, Esq.
The Myers Law Firm, P.C.
100 Spear St., Suite 1430
San Francisco, CA 94111
(415) 951-8100
Robert Keebler, CPA, MST
Virchow, Krause & Company, LLP
2201 E. Enterprise Ave., Suite 100
Appleton, WI 54913
(920) 739-3345
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 Types
of Alternative Investments
 Tax Opportunities In Venture Capital
 Tax Treatment of RSUs and
Compensatory Grants
 Tax Treatment of Oil and Gas Investments
 Using Flow-Through Entities for Start-Up
Companies, Real Estate, Small Business,
Venture Capital, and Oil and Gas
 Transfer Taxation
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 Venture
Capital
 Private Equity
 Hedge Funds
 Oil and Gas
 Alternative Energy
 Real Estate
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 Qualified
Rollovers
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Small Business Stock (“QSBS”):
Income Taxation
Limitations and Rules
Using Pass-Through Entities
Losses on QSBS
California QSBS Rules
Common Audit Issues in California
Rollover Provisions
Rollover Audit Issues
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Requirement
Federal
Requirements
C corporation.
By the corporation as original
issue.
After August 11, 1993.
No more than $50 million.
Use at least eighty percent of its
assets in an active trade or
business.
Defined by statute to include gross
assets including current assets and
intangible assets.
California
Requirements
C corporation.
By the corporation as original issue.
Payroll Test.
No requirement.
Employ at least eighty percent of its total payroll expense in
an active trade or business in California (the FTB tries to use
“payroll”as defined in the California Schedule 100R instead
of the term used in the statute).
Qualification Period.
During substantially all of the During substantially all of the sixty-month holding period
sixty-month holding period.
(State Board of Equalization precedent defines substantially
all to mean eighty percent or more, however, the FTB argues
for a higher percentage).
Holder.
Holding Period - No rollover.
Non-corporate taxpayer.
Sixty months.
Non-corporate taxpayer.
Sixty months (although on audit, FTB auditors frequently try
to apply the asset test and the payroll test over the entire
period the taxpayer owns the stock).
Holding Period - If rolled over.
Six months.
Six months.
Entity.
Stock Issued.
Date Issued.
Asset Limitation.
Asset Test.
“Asset” Defined.
After August 11, 1993.
No more than $50 million.
Use at least eighty percent of its assets in an active trade or
business in California.
Defined by statute to include gross assets including current
assets and intangible assets (the FTB tries to use the Schedule
100R property definition instead of the definition provided by
the statute).
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RSUs
& Compensatory Grants
• Income Taxes
• Limitations on Sale
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 Structural
Aspects of Limited
Partnerships and Joint Ventures in Oil and
Gas
 Intangible Drilling Costs
 IDCs and AMT
 Depletion Allowance
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 Venture
Funds
 Pass-Through of Losses
 Passive Activity Losses
 “At-Risk” Limitations
 Partnership Allocations
 Capital Account Considerations
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 GRATs
and Timing Techniques
• Transferring Appreciation of Venture Capital
Interests Using Grantor Retained Annuity Trusts
• Gift Value of the GRAT
• Term of the Trust
 IDGTs
• Transfer of Assets to an Intentionally Defective
Grantor Trust
 Other Transfer
Tax Techniques
• FLPs or FLLCs
• Charitable Lead Trusts
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