Electrical Wiring Contractor Connects

ITA was engaged to provide tax planning services to an electrical wiring contractor which provides services to commercial construction projects. The company is 100% union and offers a comprehensive benefit package and health insurance to all employees. The company had gross receipts of $1.8 million.

The client is nearing age 65 and looking toward retirement. The company was previously owned by his sister-in-law so that he could maintain his union card. It also benefited the client to be a woman owned business in the bidding process. The company is currently worth $2 million and the contractor wanted a transfer of ownership to his name.

ITA developed a succession plan to accomplish the client wishes which also included a trust and gifting strategy which incorporated certain beneficial interests and ownership transfers.

Without ITA’s succession strategy, at the death of the client’s sister-in-law, the entire value of the corporation would have been included in her estate. This would have resulted in an estate tax obligation in excess of $400,000.

The first year tax savings for the business was more than $12,000 with a five year total savings of more than $61,000. The first year tax savings to the client was more than $19,000 with a five year total savings more than $99,000. Estate planning and recommendations created a potential estate tax savings of more than $488,000.

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