Commentary and Analysis Regarding Colorado Law

Current and future landowners of real property within unincorporated portions of Weld County will soon have a new comprehensive plan along with new zoning and subdivision codes to consider when planning for potential uses and possible division of their lands. On November 9, 2020, the Weld County Commissioners heard the final reading of County Ordinance 2020-13, to enact a new Weld County Code Chapter 22, for the Weld County Comprehensive Plan (for ease of reference, the “Comp Plan”). Then on November 16, 2020, the Commissioners heard the final reading of Ordinance 2020-16, to enact an amended Code Chapter 23, regarding Zoning, and an amended Code Chapter 24, regarding Subdivisions.

Obviously, Weld County personnel and elected officials have devoted a lot of time and effort in crafting the new Comp Plan in response to an anticipated doubling of the population of Weld County over the coming decades and the desire for orderly growth. The new Comp Plan sets out several goals, the major ones being to steer future industrial and commercial development to areas closer to major highways and intersections, and to steer larger developments to areas within three miles of municipalities. The County has created a Comprehensive Plan Map which illustrates the vision of areas appropriate for various types of future development. Comprehensive Plan Map  

Each Presidential candidate has put forth a proposed plan for Federal taxation of long-term capital gains which, if passed into law in 2021 or beyond, could have major impacts on your decision regarding the timing of sales or transfers of appreciated capital assets.  

1. Mr. Trump has proposed reducing the maximum long-term capital gains tax rate from the current maximum of 20% to 15%. Assuming you sell capital assets in 2020 and have a taxable gain amount greater than $250,000, you’d also owe the Net Investment Income Tax (NIIT) percentage of 3.8% on the amount over the $250,000 threshold (if married, $200,000 for singles), for a combined tax rate of 23.8% on the long term capital gain. Obviously, if Mr. Trump’s plan to reduce the maximum tax rate to 15% is adopted in 2021 by Congress, your tax bill would be favorably impacted if you wait until 2021 or later to sell the capital asset.

The sale or purchase of a business involves The sale or purchase of a business involves many decisions which create tax impacts for the parties involved, both at the time of closing and in the future. While the media reports focus on multi-billion-dollar mergers and acquisitions, most business transfers involve far less in the amount of money involved, but each sale or purchase represents a large investment of money, time, and emotion in the business by both the seller and buyer. In every transaction, the taxing authorities, either as a result of the completion of the sale of a business, or in the future as the business continues to operate, will receive taxes from the seller or buyer.

Businesses can be sold in a number of ways, including the sale of stock or limited liability company membership interests, however most purchasers do not want to assume the potential risk of past tax or operating liabilities of the business entity, or the purchaser does not want to inherit the tax basis of the business entity in the various assets which have been partially or fully depreciated.  Accordingly, for the bulk of business transfers, the seller and purchaser will structure the business sale as an asset sale and purchase.