Tax analysis is a critical part of the business divorce attorney’s job when it comes to fashioning a shareholder buy-out agreement that, among other things, protects the selling shareholder from personal income tax liability on non-distributed or “phantom” net income that later may show up on the shareholder’s Schedule K-1. This week’s New York Business Divorce looks at a recent decision by Manhattan Supreme Court Justice Judith Gische in a fight over the tax consequences of a buy-out settlement of a corporate dissolution.

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