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There Will Be No Delaying The Corporate Transparency Act

There Will Be No Delaying The Corporate Transparency Act

        Recently, a federal district court judge in National Small Business United v. Yellen (NSBU) held that the Corporate Transparency Act (CTA) was unconstitutional.[1] But does this mean that you don’t need to report any information to FinCEN?        ...

The New Nursing Home Ownership Transparency Regulations

The New Nursing Home Ownership Transparency Regulations

Introduction When it comes to new disclosure laws, the government is not stopping at the Corporate Transparency Act (CTA). Recently, the Center for Medicare & Medicaid Services (CMS) released new regulations for REIT’s and private equity firms who own, control, or...

Do You Need an EIN Number Under The Corporate Transparency Act?

Do You Need an EIN Number Under The Corporate Transparency Act?

  An EIN (Employer Identification Number) is like a Social Security Number for your business. You now need one to open a bank account.   But there are many business owners who don’t have an EIN number. This could be from the advice of their CPA. Or maybe,...

Trusts and S-Corps

Trusts and S-Corps

  Given the restrictions on the ownership of S-Corporation stock, it may be difficult for grantors to store such stock into a trust. However, upon proper election, the IRS regulations allow for two types of trusts to remedy this issue.   Qualified Subchapter...

The Cascading Charging Order Explained

The Cascading Charging Order Explained

Real estate investors and business owners always run the risk of being sued. If they’re not protected, a courtroom loss can lead to a loss of personal assets. Even if they use a strong LLC, the victor in a car wreck case, for example, may try to get a charging order....

The IRS is Cracking Down on Trust Promoters

The IRS is Cracking Down on Trust Promoters

By: Ted Sutton, Esq. There are some promoters out there who claim that they have a trust strategy whereby the trust avoids paying income taxes. But recent IRS rulings have started to crack down on this practice.   The most recent ruling came from Chief Counsel...

The Difference Between Certificated And Uncertificated Securities

The Difference Between Certificated And Uncertificated Securities

By: Ted Sutton, Esq. A security refers to an ownership interest in a business or a financial instrument. These ownership interests can be in a private LLC, or corporation, or in a publicly traded stock or bond. There are two choices for holding ownership interests in...

The CTA Applies to Your HOA

The CTA Applies to Your HOA

By: Ted Sutton, Esq.  The Corporate Transparency Act (CTA) will apply to many different types of entities. It even extends to Homeowners Associations (HOA’s), including condominiums, community associations, and co-ops. This means that if you own an interest in an...

New York LLC Transparency Act

New York LLC Transparency Act

By: Ted Sutton, Esq. Marissa was an aspiring barista who lived in New York City. After she graduated high school, she started her own coffee shop in Brooklyn. She properly formed a New York LLC. However, she forgot to report her beneficial ownership information to...

Is Your Business an “Inactive Entity” Under the CTA?

Is Your Business an “Inactive Entity” Under the CTA?

By: Ted Sutton, Esq.  Sam was a young man who began buying stocks at a young age. As he got older, his stock portfolio kept growing. But because he held the stocks in his personal name, Sam was concerned about the portfolio being exposed in a lawsuit. In order to...

Texas: The New Hotbed For Business?

Texas: The New Hotbed For Business?

By: Ted Sutton, Esq.  In the business realm, Texas has become the lone star that is burning brighter. And it may become a top state for business in the near future.   They say that everything’s larger in Texas. This also includes a larger demand to form a...

Five Reasons Why We Don’t Recommend DAO LLCs

By: Ted Sutton, Esq.Over the last few years, the use of blockchain technology has exploded onto the scene. DAOs have grown in popularity alongside it. So, what exactly is a DAO? A DAO is a new entity form that stands for Decentralized Autonomous Organization. What’s...

AI May Be Infringing On Your Copyrights

AI May Be Infringing On Your Copyrights

By: Ted Sutton, Esq. Intro Many people have used AI to generate new artworks. A few of them can generate an image. And as we saw with the artificial hit “Heart on My Sleeve” meant to sound like Drake and The Weeknd, AI can also generate new songs.  But if you make...

Commingling Funds – Why you should NEVER do it

Commingling Funds – Why you should NEVER do it

When someone sues your business, a plaintiff may try to pierce the corporate veil to hold you personally liable. The corporate veil itself symbolizes that you are keeping your business property separate from your personal property.

Cancel Culture in a Petri Dish

Cancel Culture in a Petri Dish

Cancel Culture in a Petri Dish When Free Speech Mutates into Contract Interference You have your opinions. Must everyone else agree with you? How far will you go? Will you end up in court? If a business does something you don’t like, would you stage a boycott? Would...

The Q-Sub

The Q-Sub

A Qualified Subchapter S Subsidiary (Q-Sub) is an S-Corp that is 100% owned by a parent S-Corp. Both the parent entity and the Q-Sub can be a corporation or an LLC.

Section 1202

Section 1202

So what exactly is QSBS? Under Section 1202 of the Internal Revenue Code, a taxpayer may be exempt from paying capital gains tax when selling QSBS stock if they meet certain requirements.

The Corporate Transparency Act

The Corporate Transparency Act

The CTA requires both companies and beneficial owners to submit a report to the Department of Treasury’s Financial Crimes Network (FinCEN). Both requirements are discussed below.

How LLCs Can Protect Doctors

How LLCs Can Protect Doctors

Doctors are frequent targets of medical malpractice suits. This is why many of them have malpractice insurance to cover these claims. But what happens when the insurance does not cover the full amount?

Are You a California Resident?

Are You a California Resident?

Many people believe that as long as they are outside the state of California for six months and a day they are not residents of California. And thus don’t have to pay California’s high income taxes. But the state of California is both broke and arrogant. And they make the rules the way they want.

Design Your Asset Protection Plan

Design Your Asset Protection Plan

You design a lot of things in your life. The layout of your house, the flow of your business, the requirements on your children, and many more scenarios are all elements of conscious design. Asset protection is no different. There is an architecture, a cohesive...

Corporate Opportunities

Corporate Opportunities

Does the Rule Apply to Real Estate? If you invest in and/or syndicate real estate what are the duties to your investors? You owe them a duty of loyalty. But how far does that go? The issue of corporate opportunities is important. I wrote a whole chapter on it (from...

Checkbook IRA

Checkbook IRA

A recent case has shed light on one of the riskiest retirement plan strategies put forth by promoters. In McNulty v. Commissioner (157 T.C. 10) a U.S. Tax Court brought clarity to the scheme of using self-directed IRAs for personal investments.

Piercing the Corporate Veil – How to Avoid It

Piercing the Corporate Veil – How to Avoid It

50% of piercing the veil court cases nationwide succeed because owners are failing to properly follow corporate formalities. This exposes business owners to personal liability - meaning they can lose their possessions. What is the Corporate Veil? What is the corporate...

The Wyoming DAO LLC

The Wyoming DAO LLC

A DAO is an organization operated by a smart contract, which is a computer code running within the blockchain. The ‘A’ for Autonomous refers to the self-executing nature of it all.

California: Pay To Play

California: Pay To Play

California continues to fight for its $800 minimum franchise tax. If you live outside the state but passively own real or personal property worth over $50,000 inside California you are doing business in the state. Sayeth California’s Franchise Tax Board: Please pay the $800 or we’ll sue.

Corporate Transparency Act Update

Corporate Transparency Act Update

The Corporate Transparency Act (“CTA”) passed by the Senate and House now requires annual reporting of an entity’s beneficial owners to the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”) database.

C Corporation

C Corporation

Corporations have been used for over 500 years to limit owners’ liability and thus encourage business investment and risk taking. Their use for this purpose continues to this day. You will hear about both C Corporations and S Corporations. Both are corporations with charters granted by the state of organization.

S Corporation

S Corporation

Business owners can select how they wish to be taxed, and an S Corporation is one of those tax designations that can make a big difference in how much you pay in taxes, and how to handle profits and distribute shares.

How to Set Up Single Member LLCs

How to Set Up Single Member LLCs

You must be very careful when you are the only owner of your LLC. Single member LLCs require extra planning and special language in the operating agreement.

Incorporate First – Deduct Second

Incorporate First – Deduct Second

Should you set up a corporation or LLC before you start trying to deduct expenses? A recent case suggests you should. Many think that they can deduct all of their start up expenses before formally incorporating a business. But in Carrick v. Commissioner of Internal Revenue (T.C. Summ. Op. 2017-56, July 20, 2017) the Tax Court ruled otherwise.

LLC vs Corporation

LLC vs Corporation

Choosing the right entity can be one of the most important decisions a business makes. Business owners and investors may find themselves asking which to pick, LLC vs Corporation.