Estimated tax tip savings. Correct planning for goodwill can save you hundreds of thousands of dollars in taxes when you sell or liquidate your corporation.

William Norwalk should be a hero to corporation owners everywhere.

After he liquidated his corporation, the IRS notified him that he owed hundreds of thousands of dollars in unpaid taxes based on the value of two intangible assets—goodwill and customer lists.

But Norwalk took the IRS to court and walked away with a tax bill of $0 for these assets. That’s what we call a big win.

How did he do it? He proved that he personally owned these intangible assets—which means they were not property of the corporation and therefore could not be subject to tax on liquidation.

Norwalk’s case provides an invaluable example for all corporation owners who plan to sell or liquidate their corporations. His model applies to all C corporation owners and some S corporation owners, as we explain below.

The issue of goodwill is not a battle over peanuts. You could reduce your tax bill by hundreds of thousands of dollars if you simply ... Log in to view full article.