30May
2019
The Benefits of Charitable Remainder Trusts

A charitable remainder trust (CRT) is an irrevocable trust set up to benefit a charitable organization. The trust’s term is one lifetime, several lifetimes, or a period not to exceed 20 years. Basically, you irrevocably gift an asset to the CRT, usually an asset with a low tax basis that has appreciated significantly. During the trust’s term, you receive a certain amount of income and/or capital annually (called the retained interest). At the trust’s termination, the charitable organization receives the remaining assets (called the remainder interest). CRTs offer several benefits: Since the trust is a tax-exempt organization, the CRT can…

30May
2019
How Tax Reform Affects Divorce Settlements for Small Business Owners

How does the Tax Cuts and Jobs Act (TCJA) affect divorce settlements? Changes in the new law may require divorcing individuals — especially those who own businesses and other investments — to take a different approach to splitting assets and setting maintenance payments than under prior law. To illustrate, consider Pat and Chris, a hypothetical married couple who decided to file for divorce on Valentine’s Day 2019. Here’s an overview of several key issues they face. Business Tax Issues Pat is the family’s sole breadwinner. During her 15-year marriage with Chris, Pat started a successful electrical subcontracting business. It’s a…

30May
2019
Yours, Mine and Ours: Estate Strategies for Second Marriages

If you are one of the many Americans who are in a second marriage, you may need to revisit your estate strategy.¹ Unlike a typical first marriage, second marriages often require special consideration that should address children from a prior marriage and the disposition of assets accumulated prior to the second marriage. Second Marriages Here are some ideas you may want to think about when updating your estate strategy: You may want to ensure that your children from your first marriage are set up to receive assets from your estate, even as you provide your second spouse with adequate resources…

16May
2019
An Easier Way to Screen Applicant Resumes

Screening job applicants is a cumbersome process but you can save time and money by making your company’s website an integral part of your recruiting strategy. How? Design an online career center and applicant screening program. You can hire a firm to handle the task, or if your company has skilled IT staff, you can do it on your own. In the long run, you’ll save money. The automated process means your managers can spend time on tasks that are more productive than sifting through applications and answering every inquiry, e-mail and phone call. Here are five steps that will…

16May
2019
Best Choice: A Board of Directors or an Advisory Board?

To survive and thrive in a competitive marketplace, companies need to secure help and guidance from a wide range of sources. To do so, many companies create advisory boards, or more formally, a board of directors to help guide them and hopefully facilitate growth. If your company plans to go public, it will be required to put a board of directors in place. However, prior to that time, you may be faced with the decision as to whether to create a board of directors or an advisory board. To determine which path makes most sense for your organization, here are…

16May
2019
Define a Chain of Command

Part of the responsibility of a good manager is to smooth over conflicts among employees — yet that task can be complicated when running a family-owned business. The U.S. Small Business Administration studied family-owned companies and found they must deal with the dichotomy of workplace and personal relationships. At home, family roles — husband/wife, parent/child and in-laws — may be traditionally defined. Language is personal and attitudes may be more subjective. Here are three basic tips that can help keep those relationships from interfering with work: 1. Leave it home. Determine that family matters will stay where they belong —…

02May
2019
All Muni Bonds Are Not Created Equal

The city of Detroit emerged from bankruptcy in 2014. Still its previous inability to pay investors left some questioning their long-held assumption about the relative safety of municipal bonds.1 Without question, in the wake of Detroit’s troubles, gaining a better understanding of municipal bonds makes more sense than ever.2 At their most basic level, there are two types of municipal bonds: General obligation bonds, which are a promise by the issuer to levy taxes sufficient to make full and timely payments to investors, and Revenue bonds, which are bonds whose interest and principal are backed by the revenues of the…

02May
2019
Transfer Pricing: Maximize Opportunities and Minimize Risks

Transfer pricing continues to be one of the most important matters facing multinational companies. The tax situation in any given country can affect whether or not your business sets up facilities or holds intellectual property ownership there. The IRS and numerous tax authorities worldwide are intensifying their focus on how corporations allocate income and expenses among related entities abroad because of the potential to shift income inappropriately to lower tax jurisdictions. In order to satisfy the IRS and other tax authorities, transfer pricing must generally meet an “arm’s length” standard. In other words, the prices charged in an intercompany transaction…

02May
2019
Critical Estate Documents

Financial Documents   Question Joint Ownership Durable Power of Attorney Living Trust What does it do? Enables you to own property jointly with another person Authorizes someone to handle legal and financial decisions if you become incapacitated Holds your belongings until your death Can it authorize someone to handle your financial affairs if you are unable to communicate? Generally, no Generally, no Can it specify how you want your belongings transferred after your death? But only those belongings owned jointly Generally, no Is it private? When does it go into effect? As soon as joint ownership is recorded Either immediately…

22April
2019
Minimize Legal Risk During Internal Investigations

Let’s say an employee tips you off that some payments to a vendor seem suspicious. After looking into it, your company discovers that $60,000 in payments were all authorized by one employee and no one else in the purchasing department has heard of the vendor. You become concerned about fraud. What should you do? Clearly, you need to start some sort of investigation to determine if there is fraudulent activity going on. You might think it’s best to hand the matter over to the HR department and let them look into the matter from every angle but that could be…

22April
2019
Estate Planning: Check Your Beneficiary Designations

Regardless of your income or net worth, there’s one estate planning move you should probably make right now: Check the beneficiary designations for your life insurance policies, bank accounts, brokerage firm accounts, retirement accounts, and other assets. If you’ve not yet turned in the proper forms to designate beneficiaries, do it now. If your forms are out of date, update them. The consequences of failing to take these simple steps can be serious. If you don’t believe it, consider the following real-life horror stories. Horror Story Number 1 In Herring v. Campbell, the Fifth Circuit Court of Appeals ruled that…

22April
2019
Keep Family Employees in Line

Running a successful family business can often be more difficult than running a non-family business because the dynamics of management are blurred. A Family or a Business? Family-run companies can slide into trouble when owners don’t differentiate between what’s acceptable in the family and what’s acceptable for the business. A common question that needs to be answered: Do you have a family-first business or a business-first family? A paternalistic culture can lead to management that is based more on consensus than on performance and action. To ensure that your family-run business operates efficiently, set up performance standards that every working…

04April
2019
Seven Non-Tax Reasons to Create a Trust

Using trusts as an estate planning tool is often done to achieve tax savings. By setting up certain types of trusts, a high-net-worth individual can avoid exposure to estate taxes levied by the federal and state governments. While this an important consideration if your estate is likely to be liable for death taxes, there are many other reasons to create a trust. Here are seven reasons that are not estate-tax driven: 1. To Avoid Probate or Estate Administration. Assets in a trust don’t go through probate or an estate administration, the court-supervised process for distributing the assets. (Probate is when…

04April
2019
Understanding IRS Audit Guidance

IRS examiners usually do their homework before meeting with taxpayers and their professional representatives. This includes reviewing any relevant Audit Techniques Guides (ATGs) that typically focus on a specific industry or audit-prone business transaction. Though designed to help IRS examiners prepare for audits, ATGs are available to the public. So, small business taxpayers can review them, too — and gain valuable insights into issues that might surface during audits. Auditor Specialization In the past, IRS examiners were randomly assigned to audit taxpayers from all walks of life, with no real continuity or common thread. For example, after an examiner audited…

04April
2019
Estate Management Checklist

Effective Estate Planning requires attention to a number of important details. The following checklist will get you started developing an estate management plan. Consult with your professional adviser after reviewing the following questions. 1. Do you have a will? A will enables you to specify who you want to inherit your property and other assets. A will also enables you to name a guardian for your minor children. 2. Do you have healthcare documents in place? Healthcare documents spell out your wishes for health care if you become unable to make medical decisions for yourself. They also authorize a person…

21March
2019
Negotiating a Commercial Lease

A commercial real estate lease, like any other contract, can be negotiated. But don’t use or accept a form lease. The lease should be constructed in a way that you obtain the maximum legal, economic and tax advantages. Keep in mind that any ambiguities in the lease are usually construed by the courts against the person who drew it — in many cases, the landlord. Get qualified legal advice before signing any contract. To fully and adequately protect your rights, here are eight important considerations in a lease: 1.  A tenant can move in and start paying rent after: A certificate of occupancy has…

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