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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...

Choose Your Tax Year

Continuing our theme of taxes, another key tax choice you need to make when starting up is your fiscal year. You can choose to have your company’s fiscal year end at the end of any month, but be aware that federal taxes are due 2.5 months after the end of your fiscal year, not 3.5 months as personal taxes are.

So if you elect a calendar year (January through December and ending on December 31st) as your corporate fiscal year, your federal return will need to be filed March 15, not April 15. And as with personal taxes, a six-month extension is available by filing IRS Form 7004, which will probably extend the filing period for your state income tax as well. State income taxes are required for corporate entities in every state with some notable exceptions, including Nevada and Wyoming. Remember that an extension is for filing the tax return, not for paying the estimated taxes due. (You extend, you still pay.)

However, if you’re making quarterly estimated payments to the IRS, this shouldn’t be such a shock at the end of the year. While federal tax payments for Social Security and Medicare are required to be made quarterly with IRS Form 941 (unless you’re informed by the IRS they find your paperwork too much nuisance for too little income from you, and you file annually with a Form 944), you can also choose to make payments on a monthly, biweekly or weekly basis. Sometimes it’s less painful to pay more often and in smaller increments.

Be sure to work with your CPA on these matters to get them right. Failure to pay or even falling behind on your payroll tax obligations can lead to personal liability and serious penalties.

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...