A trust can be set up and used for various purposes–avoiding probate, protecting assets, efficiency in asset transfer, providing anonymity, conserving assets for a person that may waste the assets upon receiving them all at once, etc. Trusts are often set up with these intentions in mind, but often become ineffective or go unfunded because the administration or transfer of the assets to the trust is not handled properly. Paul can can assist you with your trust needs and follow through to ensure that you understand the proper funding, administration, and tax requirements of the trust. Click here to contact Paul to review or set up your trust or just to talk about whether a trust is something you need.
The Domestic International Sales Corporations (DISCs) is currently the only US export tax incentive. Foreign Sales Corporations and Extraterritorial Income incentives are no longer alternatives. Creating and utilizing an IC-DISC can create permanent tax savings. Apart from setting up the IC-DISC properly, there are several important agreements, such as Commission Agreements, Dividend Agreements, Export Promotion Expense Agreement, etc. that must be address to maximize tax benefits from the DISC. Contact Paul by clicking here to set up a DISC for your company or help maximizing the tax benefits of your current DISC.
A common question about transactions, especially those with high dollar amounts, is whether the gain on that transaction is subject to ordinary tax rates or capital gain tax rates. Basically if the item sold is a “capital asset” then the resulting gain or loss is a capital gain or loss. Everything else is taxed at ordinary tax rates. Although this seems to be a simple delineation, deciding whether the property sold is or was a capital asset can be very difficult. There are specific items excluded from the definition of a capital asset. There are also cases and other IRS rulings that give hints as to what a capital asset is. However, overall many practitioners and even professionals at IRS would agree the definition is unclear in many circumstances. If you would like some guidance as to your transaction, please contact Paul by clicking here.
With bank failures, foreclosures, mortgage frauds, and many other situations in today’s financial and real estate markets, borrowers are receiving 1099-C (income from cancellation of a debt) and 1099-A (acquisition or abandonment of secured property) from their lenders. Many taxpayers are confused as what they need to do when they receive one or both of these forms. Most taxpayers are concerned they will have to pay taxes on the entire amount reported on the forms. Contact Paul to help guide you through this process to determine what the consequences of these forms are to your individual tax situation. Click here to contact Paul.
Transfer pricing issues arise when a company sells or transfers goods, services, or intangibles to a related entity (usually a foreign entity). Section 482 of the Internal Revue Code give the IRS authority to adjust the income, deductions, credits, or allowances of commonly controlled taxpayers to prevent evasion of taxes or to “clearly reflect” their income. The IRS regulations under section 482 generally provide that prices charged by one affiliate to another, in an intercompany transaction involving the transfer of goods, services, or intangibles, should be consistent with prices that would have been charged if unrelated taxpayers had engaged in the same transaction under the same circumstances. If your business does business in foreign jurisdictions or utilizes a IC-DISC (Interest Charge Domestic International Sales Corporation), FSC (Foreign Sales Corporation) or a direct foreign subsidiary your business has transfer price issues. Currently the IRS has implemented the Advance Pricing Agreement (APA) Program. An APA is a binding contract between the IRS and a taxpayer by which the IRS agrees not to seek a transfer pricing adjustment under IRC § 482 for a covered transaction if the taxpayer files its tax return for a covered year consistent with the agreed transfer pricing method. Contact Paul for assistance and guidance in this complicated area of the law. Click here to contact Paul.
The IRS collection and enforcement efforts are perhaps at their highest level. In most cases there is an opportunity to stop these efforts and to get into a position to either pay the debt overtime or settle the debt. Give Paul a call to discuss your situaiton and options. Click here to contact Paul.
For tax purposes, when a person dies he or she is left with a “gross estate” A person’s gross estate consists of everything that person owns or has an interests in at the date of their death . The fair market value of these items is used to determine the person’s gross estate. Specific examples of what kind of property is includible in a person’s gross estate are cash and securities, real estate, insurance, trusts, annuities, business interests and other assets. A person’s gross estate will likely include non-probate as well as probate property. If your gross estate is $1,000,000 or more there is very likely some complexity to your estate. An estate tax return filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 – 2005; $2,000,000 in 2006 – 2008; and $3,500,000 effective for decedents dying on or after January 1, 2009. There are legal and legitmate ways to pass on property before death to minimize estate tax. Gove Paul a call to discuss your estate affairs or click here to contact Paul through this web site.
The IRS has stepped up enforcement lately. Do not go before the IRS unrepresented. They do not represent your interests. Paul is both a CPA and an Attorney that deals with the IRS and tax matters nearly every day. Call Paul if you need assistance with your problem with the IRS. Click here to contact Paul.
Effective January 1, 2009, the annual gift tax exclusion will increase from $12,000 to $13,000. That amount doubles to $26,000 if the spouse joins in the gift. Contact Paul to discuss gifting and gift tax by clicking here.
Selling or buying a business is an exciting time no matter which side of the transcation you stand. If you are selling a business you have worked hard to build your business and a new chapter of life is about to begin. If you’re buying a business your excitement comes from thinking about the potential of the road ahead and your future as an independent business owner. Regardless of which side of the transaction you are on there are important tax and legal considerations that require the attention of a professional. If you are thinking of buying a business or selling your business, contact Paul to make the transaction the most beneficial it can be. To contact Paul click here.