The recent passage of the Tax Cuts and Jobs Act (TCJA) increased interest in C Corporations. The Act permanently reduced the federal income tax rate on C Corporations from 35% to 21%. The widespread media coverage has led company founders, shareholders, and investors to ask whether they would benefit from being a C Corporation. There is another less publicized provision of the IRS Code that may also benefit shareholders of […]
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Costs of Ignoring Legalities Related to Your Business Disregard for legalities can lead to unnecessary expenses. Too often small business owners make professional agreements with a simple handshake, placing their trust in a friend or acquaintance because they believe it’s easier, quicker, and cheaper than consulting an attorney. Whether you run a regional chain of restaurants, a professional consulting firm or simply rent out a residential property, it pays to […]
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Whether you have funds in an offshore account, generate foreign business revenue, or invest outside of the United States, your activities are likely to require special care and handling to stay in compliance with Internal Revenue Service regulations. If you have control of foreign income and you aren’t readily familiar with the acronyms FBAR, FACTA, OVDP, and SFCP, it’s time to seek professional assistance. While your immediate impulse may be […]
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Estate and tax planning — it’s a subject many people like to avoid. That’s often because they think that estate planning is about two topics they’d rather not focus on: death and taxes. For some people, estate and tax planning is about something even more ominous: death, taxes and math. There is, however, another way to look at estate and tax planning. Beyond the details it’s about doing something that […]
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Creating a living trust is one of the most effective ways to set up the smooth transfer of assets from one generation to another, avoid the time and cost of the probate administration process, and eliminate or reduce certain tax burdens. Setting up a living trust, however, doesn’t avoid the process of trust administration. What is Trust Administration? But what exactly is trust administration? Broadly speaking, it’s the process by which the […]
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One of the most responsible and loving gifts a parent or spouse can provide is an estate plan that clearly articulates the distribution of assets after their death. A solid estate plan can eliminate the probate process, protect wealth, minimize or eliminate taxes, and deliver financial security for generations to come. The wishes of the deceased are assessed, addressed through estate planning, often utilizing trusts. Without a plan, all assets and debts must […]
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Many of my clients have accumulated substantial assets in an IRA. It is commonly, along with their real estate holdings, one of the largest assets they have in their estate. There are, however, certain issues that arise when the owner of the IRA passes away. Most notably, the assets in an IRA do not pass through a living trust. They pass to the beneficiaries pursuant to the terms of the […]
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In 2012, foreign nationals conducted about 17 percent of real estate transactions in California. They may have engaged the professional assistance of real estate agents and brokers to streamline the purchase process but without thoughtful attention to legal details around international tax planning strategies, they may be putting their U.S. assets at risk of significant gift and estate tax consequences – often to the tune of 40% of the property […]
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As a property owner or investor, you know the drill: the tax assessor establishes the value of any property you own at the time of purchase and you are responsible for the taxes based on that assessment. Your property tax rate may go up annually – but not by more than 2% a year thanks to Proposition 13. But what happens when you pass your property on as part of […]
Read MoreOn the campaign trail, President Trump promised to repeal the estate tax aka death tax. That plan failed. But the new tax law, effective since the beginning of the year, significantly reduces the number of estates that will need to pay the tax. It doubles the exemption limit for the estate, gift and generation-skipping taxes set for 2017. Portability remains in effect, as does the marginal estate tax rate of 40 […]
Read MoreMy corporations 101 series, which began with a look at roles, responsibilities and structure, continues. Let’s talk today about C corporations and money matters. When you create a C corporation, you’re establishing an entity that is legally independent of its shareholders and managers. The IRS views this entity as a “legal person” that can do business and make contracts. Most big brand companies are C corporations, and for good reasons: They […]
Read MoreLet’s say you’ve had an idea for a new venture. Maybe you want to open a cafe specializing in Viennese pastries. Or you’d like to start a writing school offering classes for IT consultants, attorneys and other professionals. Or you want to be a one-man company that plans trips for wealthy clients and travels the world with them. Depending on the business sector and other factors, your funding needs can […]
Read MoreHow are corporations structured? What must you do to fund them and take money out? How do you set them up? What are best business practices? I’ve talked in previous blog posts about specific aspects of closely held businesses, such as shareholder disputes and the rights of minority shareholders. Today, I want to get back to basics with a series that I’m calling Corporations 101. Let’s start with the first question above: […]
Read MoreLet’s say you run a small business, a tutoring company, an auto repair shop, a yoga studio. You’ve done well, but you’re also ready to retire. After much internal debating you decide to sell the business — and immediately you wonder what the potential pitfalls of a sale might be. The last thing you want is for the next owner to sue you. What should you be aware of as […]
Read MoreLet’s talk about a business asset called trademark. Remember President Donald Trump’s mysterious tweet on May 31? It read: “Despite the constant negative press covfefe”. That was it. The internet went abuzz. Every news network covered the cryptic message, its meaning and implications extensively. And the comedy shows had a field day or even a field week. No surprise there. But the stir also reached a federal institution, the U.S. Patent […]
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Gift and estate tax issues can be especially complex in the case of an individual whose domicile or property spans multiple countries. Each country has its own gift and estate tax laws, and when a decedent resides in one country while owning property in another, the estate may be subject to both higher and duplicative taxes. A huge potential variable is the existence of an estate and gift tax treaty […]
Read MoreLet’s talk about elder financial abuse and undue influence, and let’s start with a hypothetical scenario. Bill is an only child. Upon his father’s death, he learns that his dad’s last will leaves a third of his estate to a woman called Leeanne. Bill is stunned. His father had long been telling him that he is his sole heir. And as for Leeanne — yes, she entertained his dad by […]
Read MoreLet’s say you’re a small business owner. You just started a little coffee shop on the corner of Hill and Main, or you run the auto repair place that your grandfather founded back in the 1930s. Things have been going well — until, one day, you receive a subpoena. You take a quick look. In addition to the word subpoena, a box on the first page of the document jumps […]
Read MoreOne year after Prince’s death on April 21, 2016, the fate of his estate remains up in the air, and according to a recent article in the New York Times, the six likely heirs to the pop icon’s vast fortune are fighting. At issue are legal fees and the question how much discretion the estate’s administrator should have in managing the estate. But the disputes — as well as a […]
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The California legislature in 1992 enacted an Anti-SLAPP statute in order to protect individuals from lawsuits that challenge their constitutionality protected rights for free speech and to petition the government. These suits are commonly referred to as Strategic Lawsuits Against Public Participation or SLAPP suits, and the California law’s Anti-SLAPP statute provides tools to end such suits quickly and inexpensively. The Anti-SLAPP statute, codified in California Code of Civil Procedure […]
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